CHAPTER422 Repealedby2012Acts,ch - IowaCh422,INDIVIDUALINCOME,CORPORATE,ANDFRANCHISETAXES 2 422.12M...

1 INDIVIDUAL INCOME, CORPORATE, AND FRANCHISE TAXES, Ch 422

CHAPTER 422INDIVIDUAL INCOME, CORPORATE, AND

FRANCHISE TAXES

Referred to in §15E.204, 16.78, 63A.2, 85.61, 316.12, 404A.3, 421.62, 423.14A

DIVISION I

INTRODUCTORY PROVISIONS

422.1 Classification of chapter.422.2 Purpose or object.422.3 Definitions controlling chapter.

DIVISION II

PERSONAL NET INCOME TAX

422.4 Definitions controlling division.422.5 Tax imposed — exclusions —

alternative minimum tax.422.5A Tax rates.422.6 Income from estates or trusts.422.7 “Net income” — how computed.422.8 Allocation of income earned in

Iowa and other states.422.9 Deductions from net income.422.10 Research activities credit.422.10A Geothermal tax credit. Repealed

by 2018 Acts, ch 1161, §42, 44,46.

422.10B Renewable chemical productiontax credit.

422.11 Franchise tax credit.422.11A New jobs tax credit.422.11B Minimum tax credit.422.11C Workforce housing investment

tax credit.422.11D Historic preservation tax credit.422.11E Beginning farmer tax credit

program.422.11F Investment tax credits.422.11G Venture capital fund investment

tax credit. Repealed by 2010Acts, ch 1138, §25, 26.

422.11H Endow Iowa tax credit.422.11I Geothermal heat pump tax credit.

Repealed by 2018 Acts, ch1161, §42, 44, 46.

422.11J Tax credits for wind energyproduction and renewableenergy.

422.11K Economic development regionrevolving fund contributiontax credit. Repealed by 2010Acts, ch 1138, §15, 16.

422.11L Solar energy system tax credits.422.11M Agricultural assets transfer tax

credit. Repealed by 2019 Acts,ch 161, §15, 18, 19.

422.11N Ethanol promotion tax credit.422.11O E-85 gasoline promotion tax

credit.422.11P Biodiesel blended fuel tax credit.422.11Q Iowa fund of funds tax credit.

422.11R From farm to food donation taxcredit.

422.11S School tuition organization taxcredit.

422.11T Film qualified expenditure taxcredit. Repealed by 2012 Acts,ch 1136, §38 – 41.

422.11U Film investment tax credit.Repealed by 2012 Acts, ch1136, §38 – 41.

422.11V Redevelopment tax credit.422.11W Charitable conservation

contribution tax credit.422.11X Disaster recovery housing project

tax credit. Repealed by 2014Acts, ch 1080, §111, 114.

422.11Y E-15 plus gasoline promotion taxcredit.

422.11Z Innovation fund investment taxcredits.

422.12 Deductions from computed tax.422.12A Adoption tax credit.422.12B Earned income tax credit.422.12C Child and dependent care or

early childhood developmenttax credits.

422.12D Income tax checkoff for the Iowastate fair foundation fund.Repealed by its own terms;2014 Acts, ch 1141, §59, 61, 62.

422.12E Income tax return checkoffslimited — notification ofrepeal.

422.12F Income tax checkoff for childabuse prevention programfund. Repealed by its ownterms; 2010 Acts, ch 1193,§159, 163.

422.12G Joint income tax checkofffor veterans trust fundand volunteer fire fighterpreparedness fund.

422.12H Income tax checkoff for fish andgame protection fund.

422.12I Income tax checkoff for the Iowastate fair foundation fund.

422.12J Income tax checkoff for Iowaelection campaign fund.Repealed by 2017 Acts, ch 144,§13, 14.

422.12K Income tax checkoff for childabuse prevention programfund.

422.12L Joint income tax checkofffor veterans trust fundand volunteer fire fighterpreparedness fund. Repealedby its own terms; 2014 Acts, ch1141, §60 – 62.

Thu Dec 05 12:26:18 2019 Iowa Code 2020, Chapter 422 (74, 9)

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Ch 422, INDIVIDUAL INCOME, CORPORATE, AND FRANCHISE TAXES 2

422.12M Income tax form — indication ofdependent child health carecoverage. Repealed by 2017Acts, ch 161, §1 – 3.

422.12N Geothermal heat pump tax credit.422.13 Return by individual.422.14 Return by fiduciary.422.15 Information at source.422.16 Withholding of income tax at

source — penalties — interest— declaration of estimated tax— bond.

422.16A Job training withholding —certification and transfer.

422.17 Certificate issued by departmentto make payments withoutwithholding.

422.18 Reserved.422.19 Scope of nonresidents tax.422.20 Information confidential —

penalty.422.21 Form and time of return.422.22 Supplementary returns.422.23 Return by administrator.422.24 Payment — interest.422.24A Start-up business tax deferment.

Repealed by 2008 Acts, ch1184, §66, 67.

422.25 Computation of tax, interest, andpenalties — limitation.

422.26 Lien of tax — collection — actionauthorized.

422.27 Final report of fiduciary —conditions.

422.28 Revision of tax.422.29 Judicial review.422.30 Jeopardy assessments — posting

of bond.422.31 Statute applicable to personal tax.

DIVISION III

BUSINESS TAX ON CORPORATIONS

422.32 Definitions.422.33 Corporate tax imposed — credit.422.34 Exempted corporations and

organizations.422.34A Exempt activities of foreign

corporations.422.35 Net income of corporation — how

computed.422.36 Returns.422.37 Consolidated returns.422.38 Statutes governing corporations.422.39 Statutes applicable to corporation

tax.422.40 Cancellation of authority —

penalty — offenses.422.41 Corporations.

DIVISION IV

RETAIL SALES TAX

422.42 through 422.47 Repealed by 2003Acts, 1st Ex, ch 2, §151, 205.

422.47A through 422.47C Repealed by 96Acts, ch 1034, §70.

422.48 through 422.59 Repealed by 2003Acts, 1st Ex, ch 2, §151, 205.

DIVISION V

TAXATION OF FINANCIAL INSTITUTIONS

422.60 Imposition of tax — credit.422.61 Definitions.422.62 Due and delinquent dates.422.63 Amount of tax.422.64 Reserved.422.65 Allocation of revenue. Repealed

by 2003 Acts, ch 178, §11.422.66 Department to enforce.

DIVISION VI

ADMINISTRATION

422.67 Generally — bond — approval.422.68 Powers and duties.422.69 Moneys paid and deposited.422.70 General powers — hearings.422.71 Assistants — salaries — expenses

— bonds.422.72 Information deemed confidential

— informational exchangeagreement — subpoenas.

422.73 Correction of errors — refunds,credits, and carrybacks.

422.74 Certification of refund.422.75 Statistics — publication.422.76 through 422.84 Reserved.

DIVISION VII

ESTIMATED TAXES BY CORPORATIONS AND FINANCIALINSTITUTIONS

422.85 Imposition of estimated tax.422.86 Payment of estimated tax.422.87 Reserved.422.88 Failure to pay estimated tax.422.89 Exception to penalty.422.90 Penalty not subject to waiver.

Repealed by 99 Acts, ch 151,§85, 89.

422.91 Credit for estimated tax.422.92 Rules for short taxable year.422.93 Public utility accounting method.422.94 through 422.99 Reserved.

DIVISION VIII

ALLOCATION OF REVENUES

422.100 Allocation to the child care creditfund. Repealed by 2009 Acts,ch 182, §138.

422.101 through 422.104 Repealed by2002 Acts, ch 1150, §22.

422.105 through 422.109 Reserved.

DIVISION IX

FUEL TAX CREDIT

422.110 Income tax credit in lieu ofrefund.


3 INDIVIDUAL INCOME, CORPORATE, AND FRANCHISE TAXES, §422.3

422.111 Fuel tax credit as income taxcredit.

422.112 Aircraft fuel tax transfer.


DIVISION X

LIVESTOCK PRODUCTION TAX CREDIT

422.120 through 422.122 Repealed by2009 Acts, ch 179, §152, 153.

DIVISION I

INTRODUCTORY PROVISIONS

422.1 Classification of chapter.The provisions of this chapter are herein classified and designated as follows:1. Division I Introductory provisions.2. Division II Personal net income tax.3. Division III Business tax on corporations.4. Division IV Repealed by 2003 Acts,

1st Ex., ch. 2, §151, 205;see chapter 423.

5. Division V Taxation of financialinstitutions.

6. Division VI Administration.7. Division VII Estimated taxes by

corporations andfinancial institutions.

8. Division VIII Allocation of revenues.9. Division IX Fuel tax credit.10. Division X Repealed by 2009 Acts,

ch. 179, §152, 153.[C35, §6943-f1; C39, §6943.033; C46, 50, 54, 58, 62, 66, 71, 73, 75, 77, 79, 81, §422.1]2006 Acts, ch 1010, §100; 2011 Acts, ch 34, §97

422.2 Purpose or object.This chapter shall be known as the “Property Relief Act”, and shall have for its purpose

the direct replacement of taxes already levied or to be levied on property to the extent of thenet revenue obtained from the taxes imposed herein, which shall be apportioned back to thecredit of individual taxpayers on the basis of the assessed valuation of taxable property asprovided in division VIII of this chapter.[C35, §6943-f2; C39, §6943.034; C46, 50, 54, 58, 62, 66, 71, 73, 75, 77, 79, 81, §422.2]

422.3 Definitions controlling chapter.For the purpose of this chapter and unless otherwise required by the context:1. “Book”, “list”, “record”, or “schedule” kept by a county auditor, assessor, treasurer,

recorder, sheriff, or other county officer means the county system as defined in section 445.1.2. “Court” means the district court in the county of the taxpayer’s residence.3. “Department” means the department of revenue.4. “Director” means the director of revenue.5. “Internal Revenue Code” means one of the following:a. For tax years beginning during the 2019 calendar year, “Internal Revenue Code”means

the Internal Revenue Code of 1954, prior to the date of its redesignation as the InternalRevenue Code of 1986 by the Tax Reform Act of 1986, or means the Internal Revenue Codeof 1986 as amended and in effect on March 24, 2018. This definition shall not be construed toinclude any amendment to the Internal Revenue Code enacted after the date specified in thepreceding sentence, including any amendment with retroactive applicability or effectiveness.b. For tax years beginning on or after January 1, 2020, “Internal Revenue Code”means the

Internal Revenue Code of 1954, prior to the date of its redesignation as the Internal Revenue


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§422.3, INDIVIDUAL INCOME, CORPORATE, AND FRANCHISE TAXES 4

Code of 1986 by the Tax Reform Act of 1986, or means the Internal Revenue Code of 1986,as amended.6. The word “taxpayer” includes any person, corporation, or fiduciary who is subject to a

tax imposed by this chapter.[C35, §6943-f3; C39, §6943.035; C46, 50, 54, 58, 62, 66, 71, 73, 75, 77, 79, 81, §422.3]84 Acts, ch 1305, §25; 85 Acts, ch 230, §3; 86 Acts, ch 1213, §8; 86 Acts, ch 1245, §439; 88

Acts, ch 1028, §1; 89 Acts, ch 285, §2; 90 Acts, ch 1171, §1; 91 Acts, ch 215, §1; 92 Acts, ch1219, §1; 93 Acts, ch 113, §1; 94 Acts, ch 1166, §1; 95 Acts, ch 152, §2; 96 Acts, ch 1166, §2, 4;97 Acts, ch 135, §3, 9; 98 Acts, ch 1078, §3, 10; 99 Acts, ch 95, §3, 12, 13; 2000 Acts, ch 1146,§3, 9, 11; 2000 Acts, ch 1148, §1; 2001 Acts, ch 127, §3, 9, 10; 2002 Acts, ch 1069, §3, 10, 14;2002 Acts, ch 1119, §200, 201; 2003 Acts, ch 139, §3; 2003 Acts, ch 145, §286; 2004 Acts, 1stEx, ch 1001, §37, 41, 42; 2005 Acts, ch 24, §3, 10, 11; 2006 Acts, ch 1140, §3, 10, 11; 2007 Acts,ch 12, §3, 7, 8; 2008 Acts, ch 1011, §3, 9; 2011 Acts, ch 41, §1, 5, 6; 2012 Acts, ch 1007, §3, 7,8; 2013 Acts, ch 1, §2, 7, 8; 2014 Acts, ch 1076, §2, 6, 7; 2015 Acts, ch 1, §2, 7, 8; 2017 Acts, ch157, §3; 2018 Acts, ch 1161, §69, 97, 98Referred to in §7C.3, 8A.438, 15.335, 16.1, 16.26, 96.3, 97A.5, 97B.1A, 99B.1, 99B.27, 99D.7, 99D.8, 99F.1, 99F.6, 260C.14, 261.38,

261.43A, 262.21, 273.3, 294.10A, 294.16, 411.5, 422.7(37)(a), 425.23, 450.1, 450B.1, 504B.5, 511.39, 513B.3, 535B.2, 538A.2, 557B.1, 633.266,633A.5107, 633E.4, 634.5, 725.12Internal Revenue Code definition is updated regularly; for applicable definition in a prior tax year, refer to Iowa Acts and Code for that

yearFor provisions relating to the definition of Internal Revenue Code for the period beginning January 1, 2015, and ending December 31,

2015, and for tax years beginning during the 2015 calendar year, see 2016 Acts, ch 1007, §1, 4, 5For provisions relating to federal law applicable to calculation of federal adjusted gross income or federal taxable income for state tax

purposes for tax years beginning during the 2018 calendar year; see 2018 Acts, ch 1161, §63, 662018 amendment to subsection 5 effective January 1, 2019, and applies to tax years beginning on or after that date; 2018 Acts, ch 1161,

§97, 98

DIVISION II

PERSONAL NET INCOME TAX

Referred to in §15.293A, 15.319, 15.333, 15.355, 15E.43, 15E.44, 15E.52, 15E.62, 15E.305, 16.64, 16.82, 16.82A, 28A.24, 29C.24, 35A.13,100B.13, 190B.103, 235A.2, 257.21, 404A.2, 422.1, 422.73, 422.110, 422D.2, 422D.3, 476B.2, 476B.6, 476B.7, 476C.4, 476C.6, 483A.1A

422.4 Definitions controlling division.For the purpose of this division and unless otherwise required by the context:1. a. “Annual inflation factor”means an index, expressed as a percentage, determined by

the department by October 15 of the calendar year preceding the calendar year for which thefactor is determined, which reflects the purchasing power of the dollar as a result of inflationduring the fiscal year ending in the calendar year preceding the calendar year for which thefactor is determined. In determining the annual inflation factor, the department shall use theannual percent change, but not less than zero percent, in the gross domestic product pricedeflator computed for the second quarter of the calendar year by the bureau of economicanalysis of the United States department of commerce and shall add all of that percent changeto one hundred percent. The annual inflation factor and the cumulative inflation factor shalleach be expressed as a percentage rounded to the nearest one-tenth of one percent. Theannual inflation factor shall not be less than one hundred percent.b. “Cumulative inflation factor” means the product of the annual inflation factor for

the 1988 calendar year and all annual inflation factors for subsequent calendar years asdetermined pursuant to this subsection. The cumulative inflation factor applies to all taxyears beginning on or after January 1 of the calendar year for which the latest annualinflation factor has been determined.c. The annual inflation factor for the 1988 calendar year is one hundred percent.2. a. “Annual standard deduction factor” means an index, expressed as a percentage,

determined by the department by October 15 of the calendar year preceding the calendaryear for which the factor is determined, which reflects the purchasing power of the dollar asa result of inflation during the fiscal year ending in the calendar year preceding the calendaryear for which the factor is determined. In determining the annual standard deduction factor,the department shall use the annual percent change, but not less than zero percent, in thegross domestic product price deflator computed for the second quarter of the calendar year by





























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the bureau of economic analysis of the United States department of commerce and shall addall of that percent change to one hundred percent. The annual standard deduction factor andthe cumulative standard deduction factor shall each be expressed as a percentage roundedto the nearest one-tenth of one percent. The annual standard deduction factor shall not beless than one hundred percent.b. “Cumulative standard deduction factor” means the product of the annual standard

deduction factor for the 1989 calendar year and all annual standard deduction factors forsubsequent calendar years as determined pursuant to this subsection. The cumulativestandard deduction factor applies to all tax years beginning on or after January 1 of thecalendar year for which the latest annual standard deduction factor has been determined.3. The term “employer” shall mean and include those who have a right to exercise control

as to how, when, and where services are to be performed.4. The word “fiduciary” means a guardian, trustee, executor, administrator, receiver,

conservator, or any person, whether individual or corporate, acting in any fiduciary capacityfor any person, trust, or estate.5. The words “fiscal year” mean an accounting period of twelve months, ending on the

last day of any month other than December.6. The words “foreign country”mean any jurisdiction other than one embraced within the

United States. The words “United States”, when used in a geographical sense, include thestates, the District of Columbia, and the possessions of the United States.7. The words “head of household” have the same meaning as provided by the Internal

Revenue Code.8. The words “income year” mean the calendar year or the fiscal year upon the basis of

which the net income is computed under this division.9. The word “individual” means a natural person; and if an individual is permitted to file

as a corporation, under the Internal Revenue Code, that fictional status is not recognized forpurposes of this chapter, and the individual’s taxable income shall be computed as requiredunder the Internal Revenue Code relating to individuals not filing as a corporation, with theadjustments allowed by this chapter.10. The word “nonresident” applies only to individuals, and includes all individuals who

are not “residents” within the meaning of subsection 15 hereof.11. “Notice of assessment” means a notice by the department to a taxpayer advising the

taxpayer of an assessment of tax due.12. The term “other person” shall mean that person or entity properly empowered to act

in behalf of an individual payee and shall include authorized agents of such payees whetherthey be individuals or married couples.13. The word “paid”, for the purposes of the deductions under this division, means “paid

or accrued” or “paid or incurred”, and the terms “paid or incurred” and “paid or accrued” shallbe construed according to themethod of accounting upon the basis of which the net income iscomputed under this division. The term “received”, for the purpose of the computation of netincome under this division, means “received or accrued”, and the term “received or accrued”shall be construed according to the method of accounting upon the basis of which the netincome is computed under this division.14. The word “person” includes individuals and fiduciaries.15. The word “resident” applies only to individuals and includes, for the purpose of

determining liability to the tax imposed by this division upon or with reference to the incomeof any tax year, any individual domiciled in the state, and any other individual who maintainsa permanent place of abode within the state.16. The words “taxable income” mean the net income as defined in section 422.7 minus

the deductions allowed by section 422.9, in the case of individuals; in the case of estates ortrusts, the words “taxable income”mean the taxable income as computed for federal incometax purposes under the Internal Revenue Code, but with the following adjustments:a. Add back the personal exemption deduction taken in computing federal taxable

income.b. Make the adjustments specified in section 422.7.c. Add back Iowa income tax deducted in computing federal taxable income.
















d. Subtract federal income taxes as provided in section 422.9.e. Add back the following percentage of the qualified business income deductions under

sections 199A(a) and 199A(g) of the Internal Revenue Code taken and allowable in calculatingfederal taxable income for the applicable tax year:(1) For tax years beginning on or after January 1, 2019, but before January 1, 2021,

seventy-five percent.(2) For tax years beginning during the 2021 calendar year, fifty percent.(3) For tax years beginning on or after January 1, 2022, twenty-five percent.17. The words “tax year” mean the calendar year, or the fiscal year ending during such

calendar year, upon the basis of which the net income is computed under this division.a. If a taxpayer has made the election provided by section 441, subsection “f”, of the

Internal Revenue Code, “tax year”means the annual period so elected, varying from fifty-twoto fifty-three weeks.b. If the effective date or the applicability of a provision of this division is expressed in

terms of a tax year beginning, including, or ending with reference to a specified date which isthe first or last day of a month, a tax year described in paragraph “a” of this subsection shallbe treated as beginning with the first day of the calendar month beginning nearest to the firstday of the tax year or as ending with the last day of the calendar month ending nearest to thelast day of the tax year.18. The word “wages” has the same meaning as provided by the Internal Revenue Code.19. The term “withholding agent” means any individual, fiduciary, estate, trust,

corporation, partnership or association in whatever capacity acting and including all officersand employees of the state of Iowa, or any municipal corporation of the state of Iowa and ofany school district or school board of the state, or of any political subdivision of the stateof Iowa, or any tax-supported unit of government that is obligated to pay or has control ofpaying or does pay to any resident or nonresident of the state of Iowa or the resident’s ornonresident’s agent any wages that are subject to the Iowa income tax in the hands of suchresident or nonresident, or any of the above-designated entities making payment or havingcontrol of making such payment of any taxable Iowa income to any nonresident. The term“withholding agent” shall also include an officer or employee of a corporation or association,or a member or employee of a partnership, who as such officer, employee, or member hasthe responsibility to perform an act under section 422.16 and who subsequently knowinglyviolates the provisions of section 422.16.[C35, §6943-f4; C39, §6943.036; C46, 50, 54, 58, 62, 66, 71, 73, 75, 77, 79, 81, §422.4; 81

Acts, ch 132, §1, 2, 9; 82 Acts, ch 1023, §1, 30, ch 1203, §1]83 Acts, ch 179, §1, 2, 21, 23; 84 Acts, ch 1305, §26, 27; 87 Acts, 1st Ex, ch 1, §1; 87 Acts,

2nd Ex, ch 1, §1; 88 Acts, ch 1028, §2 – 4; 89 Acts, ch 268, §1; 94 Acts, ch 1107, §11; 94 Acts,ch 1133, §2, 16; 96 Acts, ch 1197, §1 – 4, 13, 18; 97 Acts, ch 111, §1, 8; 99 Acts, ch 152, §2, 40;2002 Acts, ch 1119, §163; 2018 Acts, ch 1161, §70, 97, 98; 2019 Acts, ch 152, §1, 15Referred to in §257.22, 422.7(41)(a), 422.9, 422.16, 422.32, 422D.3, 423.14A, 425.23, 476.20, 541B.2For future amendments to subsection 1, paragraphs b and c, and subsections 2 and 16, effective on or after January 1, 2023, contingent

upon meeting certain net general fund revenue criteria, see 2018 Acts, ch 1161, §101 – 103, 133, 1342018 amendment to subsection 16 effective January 1, 2019, and applies to tax years beginning on or after that date; 2018 Acts, ch 1161,

§97, 982019 amendment to subsection 16, paragraph e, unnumbered paragraph 1 applies retroactively to January 1, 2019, for tax years beginning

on or after that date; 2019 Acts, ch 152, §15Subsection 16, paragraph e, unnumbered paragraph 1 amended

422.5 Tax imposed — exclusions — alternative minimum tax.1. a. A tax is imposed upon every resident and nonresident of the state which tax shall

be levied, collected, and paid annually upon and with respect to the entire taxable income asdefined in this division at rates as provided in section 422.5A.b. (1) The tax imposed upon the taxable income of a nonresident shall be computed by

reducing the amount determined pursuant to paragraph “a” by the amounts of nonrefundablecredits under this division and by multiplying this resulting amount by a fraction of whichthe nonresident’s net income allocated to Iowa, as determined in section 422.8, subsection2, paragraph “a”, is the numerator and the nonresident’s total net income computed under












































section 422.7 is the denominator. This provision also applies to individuals who are residentsof Iowa for less than the entire tax year.(2) (a) The tax imposed upon the taxable income of a resident shareholder in an S

corporation or of an estate or trust with a situs in Iowa that is a shareholder in an Scorporation, which S corporation has in effect for the tax year an election under subchapterS of the Internal Revenue Code and carries on business within and without the state, may becomputed by reducing the amount determined pursuant to paragraph “a” by the amountsof nonrefundable credits under this division and by multiplying this resulting amount bya fraction of which the resident’s or estate’s or trust’s net income allocated to Iowa, asdetermined in section 422.8, subsection 2, paragraph “b”, is the numerator and the resident’sor estate’s or trust’s total net income computed under section 422.7 is the denominator. Ifa resident shareholder, or an estate or trust with a situs in Iowa that is a shareholder, haselected to take advantage of this subparagraph (2), and for the next tax year elects not to takeadvantage of this subparagraph, the resident or estate or trust shareholder shall not reelectto take advantage of this subparagraph for the three tax years immediately following thefirst tax year for which the shareholder elected not to take advantage of this subparagraph,unless the director consents to the reelection. This subparagraph also applies to individualswho are residents of Iowa for less than the entire tax year.(b) This subparagraph (2) shall not affect the amount of the taxpayer’s checkoffs under

this division, the credits from tax provided under this division, and the allocation of thesecredits between spouses if the taxpayers filed separate returns or separately on combinedreturns.2. a. There is imposed upon every resident and nonresident of this state, including estates

and trusts, the greater of the tax determined in subsection 1 or the state alternative minimumtax equal to seventy-five percent of the maximum state individual income tax rate for the taxyear, rounded to the nearest one-tenth of one percent, times the state alternative minimumtaxable income of the taxpayer as computed under this subsection.b. The state alternative minimum taxable income of a taxpayer is equal to the taxpayer’s

state taxable income, as computed with the deductions in section 422.9, with the followingadjustments:(1) Add items of tax preference included in federal alternative minimum taxable income

under section 57, except subsections (a)(1), (a)(2), and (a)(5), of the Internal Revenue Code,make the adjustments included in federal alternative minimum taxable income under section56, except subsections (a)(4), (b)(1)(C)(iii), and (d), of the Internal Revenue Code, andadd losses as required by section 58 of the Internal Revenue Code. To the extent that anypreference or adjustment is determined by an individual’s federal adjusted gross income,the individual’s federal adjusted gross income is computed in accordance with section422.7, subsections 39, 39A, 39B, and 53. In the case of an estate or trust, the items of taxpreference, adjustments, and losses shall be apportioned between the estate or trust and thebeneficiaries in accordance with rules prescribed by the director.(2) Subtract the applicable exemption amount as follows:(a) Seventeen thousand five hundred dollars for a married person who files separately or

for an estate or trust.(b) Twenty-six thousand dollars for a single person or a head of household.(c) Thirty-five thousand dollars for a married couple which files a joint return.(d) The exemption amount shall be reduced, but not below zero, by an amount equal

to twenty-five percent of the amount by which the alternative minimum taxable income ofthe taxpayer, computed without regard to the exemption amount in this subparagraph (2),exceeds the following:(i) Seventy-five thousand dollars in the case of a taxpayer described in subparagraph

division (a).(ii) One hundred twelve thousand five hundred dollars in the case of a taxpayer described

in subparagraph division (b).(iii) One hundred fifty thousand dollars in the case of a taxpayer described in

subparagraph division (c).(3) In the case of a net operating loss computed for a tax year beginning after December














31, 1982, which is carried back or carried forward to the current taxable year, the netoperating loss shall be reduced by the amount of the items of tax preference arising in suchyear which was taken into account in computing the net operating loss in section 422.9,subsection 3. The deduction for a net operating loss for a tax year beginning after December31, 1986, which is carried back or carried forward to the current taxable year shall notexceed ninety percent of the alternative minimum taxable income determined withoutregard for the net operating loss deduction.c. The state alternative minimum tax of a taxpayer whose net capital gain deduction

includes the gain or loss from the forfeiture of an installment real estate contract, thetransfer of real or personal property securing a debt to a creditor in cancellation of that debt,or from the sale or exchange of property as a result of actual notice of foreclosure, wherethe fair market value of the taxpayer’s assets exceeds the taxpayer’s liabilities immediatelybefore such forfeiture, transfer, or sale or exchange, shall not be greater than such excess,including any asset transferred within one hundred twenty days prior to such forfeiture,transfer, or sale or exchange.d. In the case of a resident, including a resident estate or trust, the state’s apportioned

share of the state alternative minimum tax is one hundred percent of the state alternativeminimum tax computed in this subsection 2. In the case of a resident or part-year residentshareholder in an S corporation which has in effect for the tax year an election undersubchapter S of the Internal Revenue Code and carries on business within and without thestate, a nonresident, including a nonresident estate or trust, or an individual, estate, or trustthat is domiciled in the state for less than the entire tax year, the state’s apportioned shareof the state alternative minimum tax is the amount of tax computed under this subsection 2,reduced by the applicable credits in sections 422.10 through 422.12 and this result multipliedby a fraction with a numerator of the sum of state net income allocated to Iowa as determinedin section 422.8, subsection 2, paragraph “a” or “b” as applicable, plus tax preference items,adjustments, and losses under subparagraph (1) attributable to Iowa and with a denominatorof the sum of total net income computed under section 422.7 plus all tax preference items,adjustments, and losses under subparagraph (1). In computing this fraction, those itemsexcludable under subparagraph (1) shall not be used in computing the tax preference items.Married taxpayers electing to file separate returns or separately on a combined return mustallocate the minimum tax computed in this subsection in the proportion that each spouse’srespective preference items, adjustments, and losses under subparagraph (1) bear to thecombined preference items, adjustments, and losses under subparagraph (1) of both spouses.3. a. The tax shall not be imposed on a resident or nonresident whose net income, as

defined in section 422.7, is thirteen thousand five hundred dollars or less in the case ofmarriedpersons filing jointly or filing separately on a combined return, heads of household, andsurviving spouses or nine thousand dollars or less in the case of all other persons; but in theevent that the payment of tax under this division would reduce the net income to less thanthirteen thousand five hundred dollars or nine thousand dollars as applicable, then the taxshall be reduced to that amount which would result in allowing the taxpayer to retain a netincome of thirteen thousand five hundred dollars or nine thousand dollars as applicable. Thepreceding sentence does not apply to estates or trusts. For the purpose of this subsection, theentire net income, including any part of the net income not allocated to Iowa, shall be takeninto account. For purposes of this subsection, net income includes all amounts of pensionsor other retirement income, except for military retirement pay excluded under section 422.7,subsection 31A, paragraph “a”, or section 422.7, subsection 31B, paragraph “a”, received fromany source which is not taxable under this division as a result of the government pensionexclusions in section 422.7, or any other state law. If the combined net income of a husbandand wife exceeds thirteen thousand five hundred dollars, neither of them shall receive thebenefit of this subsection, and it is immaterial whether they file a joint return or separatereturns. However, if a husband andwife file separate returns and have a combined net incomeof thirteen thousand five hundred dollars or less, neither spouse shall receive the benefit ofthis paragraph, if one spouse has a net operating loss and elects to carry back or carry forwardthe loss as provided in section 422.9, subsection 3. A person who is claimed as a dependent byanother person as defined in section 422.12 shall not receive the benefit of this subsection if
























the person claiming the dependent has net income exceeding thirteen thousand five hundreddollars or nine thousand dollars as applicable or the person claiming the dependent and theperson’s spouse have combined net income exceeding thirteen thousand five hundred dollarsor nine thousand dollars as applicable.b. In lieu of the computation in subsection 1 or 2, or in paragraph “a” of this subsection,

if the married persons’, filing jointly or filing separately on a combined return, head ofhousehold’s, or surviving spouse’s net income exceeds thirteen thousand five hundreddollars, the regular tax imposed under this division shall be the lesser of the maximum stateindividual income tax rate times the portion of the net income in excess of thirteen thousandfive hundred dollars or the regular tax liability computed without regard to this sentence.Taxpayers electing to file separately shall compute the alternate tax described in thisparagraph using the total net income of the husband and wife. The alternate tax describedin this paragraph does not apply if one spouse elects to carry back or carry forward the lossas provided in section 422.9, subsection 3.3A. Reserved.3B. a. The tax shall not be imposed on a resident or nonresident who is at least sixty-five

years old on December 31 of the tax year and whose net income, as defined in section 422.7,is thirty-two thousand dollars or less in the case of married persons filing jointly or filingseparately on a combined return, heads of household, and surviving spouses or twenty-fourthousand dollars or less in the case of all other persons; but in the event that the payment oftax under this division would reduce the net income to less than thirty-two thousand dollarsor twenty-four thousand dollars as applicable, then the tax shall be reduced to that amountwhich would result in allowing the taxpayer to retain a net income of thirty-two thousanddollars or twenty-four thousand dollars as applicable. The preceding sentence does notapply to estates or trusts. For the purpose of this subsection, the entire net income, includingany part of the net income not allocated to Iowa, shall be taken into account. For purposesof this subsection, net income includes all amounts of pensions or other retirement income,except for military retirement pay excluded under section 422.7, subsection 31A, paragraph“a”, or section 422.7, subsection 31B, paragraph “a”, received from any source which isnot taxable under this division as a result of the government pension exclusions in section422.7, or any other state law. If the combined net income of a husband and wife exceedsthirty-two thousand dollars, neither of them shall receive the benefit of this subsection, andit is immaterial whether they file a joint return or separate returns. However, if a husbandand wife file separate returns and have a combined net income of thirty-two thousand dollarsor less, neither spouse shall receive the benefit of this paragraph, if one spouse has a netoperating loss and elects to carry back or carry forward the loss as provided in section 422.9,subsection 3. A person who is claimed as a dependent by another person as defined in section422.12 shall not receive the benefit of this subsection if the person claiming the dependenthas net income exceeding thirty-two thousand dollars or twenty-four thousand dollars asapplicable or the person claiming the dependent and the person’s spouse have combined netincome exceeding thirty-two thousand dollars or twenty-four thousand dollars as applicable.b. In lieu of the computation in subsection 1, 2, or 3, if the married persons’, filing jointly

or filing separately on a combined return, head of household’s, or surviving spouse’s netincome exceeds thirty-two thousand dollars, the regular tax imposed under this division shallbe the lesser of the maximum state individual income tax rate times the portion of the netincome in excess of thirty-two thousand dollars or the regular tax liability computed withoutregard to this sentence. Taxpayers electing to file separately shall compute the alternate taxdescribed in this paragraph using the total net income of the husband and wife. The alternatetax described in this paragraph does not apply if one spouse elects to carry back or carryforward the loss as provided in section 422.9, subsection 3.c. This subsection applies even though one spouse has not attained the age of sixty-five,

if the other spouse is at least sixty-five at the end of the tax year.4. The tax herein levied shall be computed and collected as hereinafter provided.5. The provisions of this division shall apply to all salaries received by federal officials or

employees of the United States government as provided for herein.6. Upon determination of the latest cumulative inflation factor, the director shall multiply



























each dollar amount set forth in section 422.5A by this cumulative inflation factor, shall roundoff the resulting product to the nearest one dollar, and shall incorporate the result into theincome tax forms and instructions for each tax year.7. The state income tax of a taxpayer whose net income includes the gain or loss from

the forfeiture of an installment real estate contract, the transfer of real or personal propertysecuring a debt to a creditor in cancellation of that debt, or from the sale or exchangeof property as a result of actual notice of foreclosure where the fair market value of thetaxpayer’s assets exceeds the taxpayer’s liabilities immediately before such forfeiture,transfer, or sale or exchange shall not be greater than such excess, including any assettransferred within one hundred twenty days prior to such forfeiture, transfer, or sale orexchange. For purposes of this subsection, in the case of married taxpayers, except in thecase of a husband and wife who live apart at all times during the tax year, the assets andliabilities of both spouses shall be considered in determining if the fair market value of thetaxpayer’s assets exceed the taxpayer’s liabilities.8. In addition to the other taxes imposed by this section, a tax is imposed on the amount

of a lump sum distribution for which the taxpayer has elected under section 402(e) of theInternal Revenue Code to be separately taxed for federal income tax purposes for the taxyear. The rate of tax is equal to twenty-five percent of the separate federal tax imposed onthe amount of the lump sum distribution. A nonresident is liable for this tax only on thatportion of the lump sum distribution allocable to Iowa. The total amount of the lump sumdistribution subject to separate federal tax shall be included in net income for purposes ofdetermining eligibility under subsections 3 and 3B, as applicable.9. In the case of income derived from the sale or exchange of livestock which qualifies

under section 451(e) of the Internal Revenue Code because of drought, the taxpayer mayelect to include the income in the taxpayer’s net income in the tax year following the year ofthe sale or exchange in accordance with rules prescribed by the director.10. If an individual’s federal income tax was forgiven for a tax year under section 692

of the Internal Revenue Code, because the individual was killed while serving in an areadesignated by the president of the United States or the United States Congress as a combatzone, the individual was missing in action and presumed dead, or the individual was killedoutside the United States in a terroristic or military action while the individual was a militaryor civilian employee of the United States, the individual’s Iowa income tax is also forgivenfor the same tax year.11. If a taxpayer repays in the current tax year certain amounts of income that were

subject to tax under this division in a prior year and a tax benefit would be allowed undersimilar circumstances under section 1341 of the Internal Revenue Code, a tax benefit shall beallowed on the Iowa return. The tax benefit shall be the reduced tax for the current tax yeardue to the deduction for the repaid income or the reduction in tax for the prior year or yearsdue to exclusion of the repaid income. The reduction in tax shall qualify as a refundable taxcredit on the return for the current year pursuant to rules prescribed by the director.[C35, §6943-f5; C39, §6943.037; C46, 50, 54, 58, 62, 66, 71, 73, 75, 77, 79, 81, §422.5; 81

Acts, ch 132, §3; 82 Acts, ch 1023, §2, 31, ch 1064, §1, 2, ch 1226, §1, 2, 6]83 Acts, ch 101, §86; 83 Acts, ch 179, §3, 20, 22; 85 Acts, ch 243, §1, 2; 86 Acts, ch 1213, §9;

86 Acts, ch 1232, §1; 86 Acts, ch 1236, §3, 4; 87 Acts, ch 214, §2; 87 Acts, 1st Ex, ch 1, §2; 87Acts, 2nd Ex, ch 1, §2, 3; 88 Acts, ch 1028, §5 – 11; 89 Acts, ch 228, §4, 5; 89 Acts, ch 251, §11;89 Acts, ch 268, §2, 3; 89 Acts, ch 296, §41; 91 Acts, ch 159, §7; 91 Acts, ch 196, §1; 92 Acts,2nd Ex, ch 1001, §217, 218, 224; 96 Acts, ch 1166, §3, 4; 96 Acts, ch 1197, §14, 15, 18; 96 Acts,ch 1219, §27; 97 Acts, ch 8, §1, 2; 97 Acts, ch 111, §2 – 4, 7, 8; 97 Acts, ch 158, §11, 49; 99 Acts,ch 151, §4, 89; 2003 Acts, ch 139, §4; 2006 Acts, ch 1112, §1 – 3, 5; 2006 Acts, ch 1158, §8 – 10;2007 Acts, ch 126, §65, 112, 116; 2009 Acts, ch 41, §263; 2009 Acts, ch 133, §135; 2011 Acts,ch 41, §17, 23, 24; 2012 Acts, ch 1021, §72; 2013 Acts, ch 140, §120, 123, 124; 2014 Acts, ch1116, §1, 2, 5; 2017 Acts, ch 157, §4; 2018 Acts, ch 1161, §71, 72, 74, 97, 98Referred to in §2.48, 257.21, 422.5A, 422.6, 422.8, 422.10, 422.11B, 422.13, 422.16, 422.21, 422D.2For future amendment to subsection 1, paragraph b, subparagraph (2), subparagraph division (b), effective on or after January 1, 2023,

contingent upon the meeting of certain net general fund revenue criteria, see 2018 Acts, ch 1161, §104, 133, 134For future amendments to subsections 2, 3, and 3B, effective on or after January 1, 2023, contingent upon the meeting of certain net

general fund revenue criteria, see 2018 Acts, ch 1161, §105, 106, 133, 134




























































https://www.legis.iowa.gov/docs/code/422.11B.pdf






For provisions relating to the calculation of state alternative minimum taxable income in light of the disallowance of additional first-yeardepreciation under section 168(k) of the Internal Revenue Code for tax years beginning during the 2015 calendar year, see 2016 Acts, ch1007, §3 – 5; 2017 Acts, ch 157, §11 – 132018 amendments to subsection 1, subsection 2, paragraph a, and subsection 6, effective January 1, 2019, and apply to tax years beginning

on or after that date; 2018 Acts, ch 1161, §97, 98

422.5A Tax rates.The tax imposed in section 422.5 shall be calculated at the following rates:1. On all taxable income from 0 through $1,000, the rate of 0.33 percent.2. On all taxable income exceeding $1,000 but not exceeding $2,000, the rate of 0.67

percent.3. On all taxable income exceeding $2,000 but not exceeding $4,000, the rate of 2.25






percent.9. On all taxable income exceeding $45,000, the rate of 8.53 percent.2018 Acts, ch 1161, §73, 97, 98Referred to in §422.5, 422.16For future amendment to this section, effective on or after January 1, 2023, contingent upon the meeting of certain net general fund

revenue criteria, see 2018 Acts, ch 1161, §107, 133, 134

422.6 Income from estates or trusts.1. The tax imposed by section 422.5 less the amounts of nonrefundable credits allowed

under this division apply to and are a charge against estates and trusts with respect to theirtaxable income, and the rates are the same as those applicable to individuals. The fiduciaryshall make the return of income for the estate or trust for which the fiduciary acts, whether theincome is taxable to the estate or trust or to the beneficiaries. However, for tax years endingafter August 5, 1997, if the trust is a qualified preneed funeral trust as set forth in section685 of the Internal Revenue Code and the trustee has elected the special tax treatment undersection 685 of the Internal Revenue Code, neither the trust nor the beneficiary is subject toIowa income tax on income accruing to the trust.2. The beneficiary of a trust who receives an accumulation distribution shall be allowed

credit without interest for the Iowa income taxes paid by the trust attributable to theaccumulation distribution in a manner corresponding to the provisions for credit underthe federal income tax relating to accumulation distributions as contained in the InternalRevenue Code. The trust is not entitled to a refund of taxes paid on the distributions. Thetrust shall maintain detailed records to verify the computation of the tax.[C35, §6943-f6; C39, §6943.038; C46, 50, 54, 58, 62, 66, 71, 73, 75, 77, 79, 81, §422.6]83 Acts, ch 179, §4, 25; 84 Acts, ch 1305, §28; 88 Acts, ch 1028, §12; 89 Acts, ch 251, §12; 91

Acts, ch 159, §8; 97 Acts, ch 23, §42; 98 Acts, ch 1078, §4, 11; 99 Acts, ch 95, §4, 12, 13; 2002Acts, ch 1145, §8; 2006 Acts, ch 1158, §11; 2019 Acts, ch 24, §104Referred to in §422.14, 422.16Code editor directive applied

422.7 “Net income” — how computed.The term “net income” means the adjusted gross income before the net operating loss

deduction as properly computed for federal income tax purposes under the Internal RevenueCode, with the following adjustments:1. Subtract interest and dividends from federal securities.2. Add interest and dividends from foreign securities and from securities of state and

other political subdivisions exempt from federal income tax under the Internal Revenue Code,



























except for those securities the interest and dividends from which are exempt from taxationby the state of Iowa as otherwise provided by law, including:a. Vision Iowa program bonds pursuant to section 12.71, subsection 8.b. School infrastructure program bonds pursuant to section 12.81, subsection 8.c. Iowa jobs program revenue bonds pursuant to section 12.87, subsection 8.d. Iowa utility board and Iowa consumer advocate building project bonds pursuant to

section 12.91, subsection 9.e. Iowa finance authority beginning farmer loan program bonds pursuant to section 16.64,

subsection 2.f. Water pollution control works and drinking facilities financing program bonds pursuant

to section 16.131, subsection 5.g. Iowa prison infrastructure revenue bonds pursuant to section 12.80, subsection 3, and

section 16.177, subsection 8.h. Quad cities interstate metropolitan authority bonds pursuant to section 28A.24.i. Iowa finance authority 911 program bonds pursuant to section 34A.20, subsection 6.j. Soil and water conservation subdistrict bonds pursuant to section 161A.22.k. Community college residence hall and dormitory bonds pursuant to section 260C.61.l. Community college bond program bonds pursuant to section 260C.71, subsection 6.m. Higher education loan authority bonds pursuant to section 261A.27.n. State board of regents bonds pursuant to sections 262.41, 262.51, 262.60, 262A.8, and

263A.6.o. Interstate bridges bonds pursuant to section 313A.36.p. Aviation authority bonds pursuant to section 330A.16.q. County health center bonds pursuant to section 331.441, subsection 2, paragraph “c”,

subparagraph (7).r. Rural water district bonds pursuant to section 357A.15.s. Urban renewal bonds pursuant to section 403.9, subsection 2.t. Municipal housing project bonds pursuant to section 403A.12.u. Comprehensive petroleum underground storage tank fund bonds pursuant to section

455G.6, subsection 14.3. Where the adjusted gross income includes capital gains or losses, or gains or losses

from property other than capital assets, and such gains or losses have been determined byusing a basis established prior to January 1, 1934, an adjustment may be made, under rulesprescribed by the director, to reflect the difference resulting from the use of a basis of costor January 1, 1934, fair market value, less depreciation allowed or allowable, whicheveris higher. Provided that the basis shall be fair market value as of January 1, 1955, lessdepreciation allowed or allowable, in the case of property acquired prior to that date if useof a prior basis is declared to be invalid.4. Reserved.5. Individual taxpayers and married taxpayers who file a joint federal income tax return

and who elect to file a joint return, separate returns, or separate filing on a combined returnfor Iowa income tax purposes, may avail themselves of the disability income exclusion andshall compute the amount of the disability income exclusion subject to the limitations forjoint federal income tax return filers provided by section 105(d) of the Internal Revenue Code.The disability income exclusion provided in section 105(d) of the Internal Revenue Code, asamended up to and including December 31, 1982, continues to apply for state income taxpurposes for tax years beginning on or after January 1, 1984.6. Reserved.7. Married taxpayers who file a joint federal income tax return and who elect to file

separate returns or separate filing on a combined return for Iowa income tax purposes, mayavail themselves of the expensing of business assets and capital loss provisions of sections179(a) and 1211(b) respectively of the Internal Revenue Code and shall compute the amountof expensing of business assets and capital loss subject to the limitations for joint federalincome tax return filers provided by sections 179(b) and 1211(b) respectively of the InternalRevenue Code.8. Subtract the amount of the work opportunity tax credit allowable for the tax year under




























https://www.legis.iowa.gov/docs/code/455G.6.pdf



section 51 of the Internal Revenue Code to the extent that the credit increased federal adjustedgross income.9. Subtract the amount of the alcohol and cellulosic biofuel fuels credit allowable for the

tax year under section 40 of the Internal Revenue Code to the extent that the credit increasedfederal adjusted gross income.10. Notwithstanding the method for computing the amount of travel expenses that may

be deducted under section 162(h) of the Internal Revenue Code, for tax years beginning on orafter January 1, 1987, a member of the general assembly whose place of residence within thelegislative district is greater than fifty miles from the capitol building of the state may deductthe total amount per day determined under section 162(h)(1)(B) of the Internal Revenue Codeand a member of the general assembly whose place of residence within the legislative districtis fifty or fewer miles from the capitol building of the state may deduct fifty dollars per day.This subsection does not apply to a member of the general assembly who elects to itemizefor state tax purposes the member’s travel expenses.11. Add the amounts deducted and subtract the amounts included as income as a result

of the treatment provided sale-leaseback agreements under section 168(f)(8) of the InternalRevenue Code for property placed in service by the transferee prior to January 1, 1986, tothe extent that the amounts deducted and the amounts included in income are not otherwisedeductible or included in income under the Internal Revenue Code as amended to andincluding December 31, 1985. Entitlement to depreciation on any property included in asale-leaseback agreement which is placed in service by the transferee prior to January 1,1986, shall be determined under the Internal Revenue Code as amended to and includingDecember 31, 1985, excluding section 168(f)(8) in making the determination.12. a. If the adjusted gross income includes income or loss from a small business operated

by the taxpayer, an additional deduction shall be allowed in computing the income or lossfrom the small business if the small business hired for employment in the state during itsannual accounting period ending with or during the taxpayer’s tax year any of the following:(1) An individual with a disability domiciled in this state at the time of the hiring who

meets any of the following conditions:(a) Has a physical or mental impairment which substantially limits one or more major life

activities.(b) Has a record of that impairment.(c) Is regarded as having that impairment.(2) An individual domiciled in this state at the time of the hiring who meets any of the

following conditions:(a) Has been convicted of a felony in this or any other state or the District of Columbia.(b) Is on parole pursuant to chapter 906.(c) Is on probation pursuant to chapter 907, for an offense other than a simple

misdemeanor.(d) Is in a work release program pursuant to chapter 904, subchapter IX.(3) An individual, whether or not domiciled in this state at the time of the hiring, who is on

parole or probation and to whom the interstate probation and parole compact under section907A.1, Code 2001, applies, or to whom the interstate compact for adult offender supervisionunder chapter 907B applies.b. (1) The amount of the additional deduction is equal to sixty-five percent of the wages

paid to individuals, but shall not exceed twenty thousand dollars per individual, named inparagraph “a”, subparagraphs (1), (2), and (3) who were hired for the first time by thatbusiness during the annual accounting period for work done in the state. This additionaldeduction is allowed for the wages paid to those individuals successfully completing aprobationary period during the twelve months following the date of first employment by thebusiness and shall be deducted at the close of the annual accounting period.(2) The additional deduction shall not be allowed for wages paid to an individual who was

hired to replace an individual whose employment was terminated within the twelve-monthperiod preceding the date of first employment. However, if the individual being replaced leftemployment voluntarily without good cause attributable to the employer or if the individual






https://www.legis.iowa.gov/docs/code/2001/907A.1.pdf


https://www.legis.iowa.gov/docs/code//907B.pdf


was discharged formisconduct in connectionwith the individual’s employment as determinedby the department of workforce development, the additional deduction shall be allowed.(3) A taxpayer who is a partner of a partnership or a shareholder of a subchapter S

corporation, may deduct that portion of wages qualified under this subsection paid by thepartnership or subchapter S corporation based on the taxpayer’s pro rata share of the profitsor losses from the partnership or subchapter S corporation.c. For purposes of this subsection:(1) “Physical or mental impairment” means any physiological disorder or condition,

cosmetic disfigurement, or anatomical loss affecting one or more of the body systems or anymental or psychological disorder, including intellectual disability, organic brain syndrome,emotional or mental illness, and specific learning disabilities.(2) (a) “Small business”means a profit or nonprofit business, including but not limited to

an individual, partnership, corporation, joint venture, association, or cooperative, to whichthe following apply:(i) It is not an affiliate or subsidiary of a business dominant in its field of operation.(ii) It has twenty or fewer full-time equivalent positions and not more than the equivalent

of three million dollars in annual gross revenues as computed for the preceding fiscal year oras the average of the three preceding fiscal years.(iii) It does not include the practice of a profession.(b) “Small business” includes an employee-owned business which has been an

employee-owned business for less than three years or which meets the conditions ofsubparagraph division (a), subparagraph subdivisions (i) through (iii).(c) For purposes of this definition, “dominant in its field of operation”means having more

than twenty full-time equivalent positions andmore than three million dollars in annual grossrevenues, and “affiliate or subsidiary of a business dominant in its field of operation” meansa business which is at least twenty percent owned by a business dominant in its field ofoperation, or by partners, officers, directors, majority stockholders, or their equivalents, of abusiness dominant in that field of operation.12A. a. If the adjusted gross income includes income or loss from a business operated by

the taxpayer, and if the business does not qualify for the adjustment under subsection 12, anadditional deduction shall be allowed in computing the income or loss from the business ifthe business hired for employment in the state during its annual accounting period endingwith or during the taxpayer’s tax year either of the following:(1) An individual domiciled in this state at the time of the hiring who meets any of the



parole or probation and to whom the interstate probation and parole compact under section907A.1, Code 2001, applies, or to whom the interstate compact for adult offender supervisionunder chapter 907B applies.b. The amount of the additional deduction is equal to sixty-five percent of the wages

paid to individuals, but shall not exceed twenty thousand dollars per individual, named inparagraph “a”, subparagraphs (1) and (2) who were hired for the first time by that businessduring the annual accounting period for work done in the state. This additional deductionis allowed for the wages paid to those individuals successfully completing a probationaryperiod during the twelve months following the date of first employment by the business andshall be deducted at the close of the annual accounting period.c. The additional deduction shall not be allowed for wages paid to an individual who was

hired to replace an individual whose employment was terminated within the twelve-monthperiod preceding the date of first employment. However, if the individual being replaced leftemployment voluntarily without good cause attributable to the employer or if the individual












was discharged formisconduct in connectionwith the individual’s employment as determinedby the department of workforce development, the additional deduction shall be allowed.d. A taxpayer who is a partner of a partnership or a shareholder of a subchapter S

corporation, may deduct that portion of wages qualified under this subsection paid by thepartnership or subchapter S corporation based on the taxpayer’s pro rata share of the profitsor losses from the partnership or subchapter S corporation.e. The department shall develop and distribute information concerning the deduction

available for businesses employing persons named in paragraph “a”, subparagraphs (1) and(2).13. a. Subtract, to the extent included, the amount of additional social security benefits

taxable under the Internal Revenue Code for tax years beginning on or after January 1, 1994,but before January 1, 2014. The amount of social security benefits taxable as provided insection 86 of the Internal Revenue Code, as amended up to and including January 1, 1993,continues to apply for state income tax purposes for tax years beginning on or after January1, 1994, but before January 1, 2014.b. (1) For tax years beginning in the 2007 calendar year, subtract, to the extent included,

thirty-two percent of taxable social security benefits remaining after the subtraction inparagraph “a”.(2) For tax years beginning in the 2008 calendar year, subtract, to the extent included,

thirty-two percent of taxable social security benefits remaining after the subtraction inparagraph “a”.(3) For tax years beginning in the 2009 calendar year, subtract, to the extent included,

forty-three percent of taxable social security benefits remaining after the subtraction inparagraph “a”.(4) For tax years beginning in the 2010 calendar year, subtract, to the extent included,

fifty-five percent of taxable social security benefits remaining after the subtraction inparagraph “a”.(5) For tax years beginning in the 2011 calendar year, subtract, to the extent included,

sixty-seven percent of taxable social security benefits remaining after the subtraction inparagraph “a”.(6) For tax years beginning in the 2012 calendar year, subtract, to the extent included,

seventy-seven percent of taxable social security benefits remaining after the subtraction inparagraph “a”.(7) For tax years beginning in the 2013 calendar year, subtract, to the extent included,

eighty-nine percent of taxable social security benefits remaining after the subtraction inparagraph “a”.c. Married taxpayers, who file a joint federal income tax return and who elect to file

separate returns or who elect separate filing on a combined return for state income taxpurposes, shall allocate between the spouses the amount of benefits subtracted underparagraphs “a” and “b” from net income in the ratio of the social security benefits receivedby each spouse to the total of these benefits received by both spouses.d. For tax years beginning on or after January 1, 2014, subtract, to the extent included,

the amount of social security benefits taxable under section 86 of the Internal Revenue Code.14. Add the amount of intangible drilling and development costs optionally deducted in

the year paid or incurred as described in section 57(a)(2) of the Internal Revenue Code. Thisamount may be recovered through cost depletion or depreciation, as appropriate under rulesprescribed by the director.15. Add the percentage depletion amount determined with respect to an oil, gas, or

geothermal well as described in section 57(a)(1) of the Internal Revenue Code.16. Subtract the income resulting from the forfeiture of an installment real estate contract,

the transfer of real or personal property securing a debt to a creditor in cancellation of thatdebt, or from the sale or exchange of property as a result of actual notice of foreclosure if allof the following conditions are met:a. The forfeiture, transfer, or sale or exchange was done for the purpose of establishing a

positive cash flow.b. Immediately before the forfeiture, transfer, or sale or exchange, the taxpayer’s debt




to asset ratio exceeded ninety percent as computed under generally accepted accountingpractices.c. The taxpayer’s net worth at the end of the tax year is less than seventy-five thousand

dollars. In determining a taxpayer’s net worth at the end of the tax year a taxpayer shallinclude any asset transferred within one hundred twenty days prior to the end of the taxyear without adequate and full consideration in money or money’s worth. In determiningthe taxpayer’s debt to asset ratio, the taxpayer shall include any asset transferred within onehundred twenty days prior to such forfeiture, transfer, or sale or exchange without adequateand full consideration in money or money’s worth. For purposes of this subsection, actualnotice of foreclosure includes, but is not limited to, bankruptcy or written notice from acreditor of the creditor’s intent to foreclose where there is a reasonable belief that thecreditor can force a sale of the asset. For purposes of this subsection, in the case of marriedtaxpayers, except in the case of a husband and wife who live apart at all times duringthe tax year, the assets and liabilities of both spouses shall be considered for purposes ofdetermining the taxpayer’s net worth or the taxpayer’s debt to asset ratio.17. Add interest and dividends from regulated investment companies exempt from federal

income tax under the Internal Revenue Code and subtract the loss on the sale or exchange ofa share of a regulated investment company held for six months or less to the extent the losswas disallowed under section 852(b)(4)(B) of the Internal Revenue Code.18. Reserved.19. Reserved.20. a. Subtract, to the extent included, the proceeds received pursuant to a judgment in

or settlement of a lawsuit against the manufacturer or distributor of a Vietnam herbicidefor damages resulting from exposure to the herbicide. This subsection applies to proceedsreceived by a taxpayer who is a disabled veteran or who is a beneficiary of a disabled veteran.b. For purposes of this subsection:(1) “Vietnam herbicide” means a herbicide, defoliant or other causative agent containing

dioxin, including, but not limited to, Agent Orange, used in the Vietnam Conflict beginningDecember 22, 1961, and ending May 7, 1975, inclusive.(2) “Agent Orange” means the herbicide composed of trichlorophenoxyacetic acid and

dichlorophenoxyacetic acid and the contaminant dioxin (TCDD).21. Subtract the net capital gain from the following:a. (1) Net capital gain from the sale of real property used in a business, in which the

taxpayer materially participated for ten years, as defined in section 469(h) of the InternalRevenue Code, and which has been held for a minimum of ten years, or from the sale of abusiness, as defined in section 423.1, in which the taxpayer materially participated for tenyears, as defined in section 469(h) of the Internal Revenue Code, and which has been heldfor a minimum of ten years. The sale of a business means the sale of all or substantially allof the tangible personal property or service of the business.However, where the business is sold to individuals who are all lineal descendants of the

taxpayer, the taxpayer does not have to have materially participated in the business in orderfor the net capital gain from the sale to be excluded from taxation.However, in lieu of the net capital gain deduction in this paragraph and paragraphs “b”,

“c”, and “d”, where the business is sold to individuals who are all lineal descendants of thetaxpayer, the amount of capital gain from each capital asset may be subtracted in determiningnet income.(2) For purposes of this paragraph, “lineal descendant” means children of the taxpayer,

including legally adopted children and biological children, stepchildren, grandchildren,great-grandchildren, and any other lineal descendants of the taxpayer.b. Net capital gain from the sale of cattle or horses held by the taxpayer for breeding,

draft, dairy, or sporting purposes for a period of twenty-four months or more from the dateof acquisition; but only if the taxpayer received more than one-half of the taxpayer’s grossincome from farming or ranching operations during the tax year.c. Net capital gain from the sale of breeding livestock, other than cattle or horses, if the

livestock is held by the taxpayer for a period of twelve months or more from the date of








acquisition; but only if the taxpayer received more than one-half of the taxpayer’s grossincome from farming or ranching operations during the tax year.d. Net capital gain from the sale of timber as defined in section 631(a) of the Internal

Revenue Code.However, to the extent otherwise allowed, the deduction provided in this subsection is not

allowed for purposes of computation of a net operating loss in section 422.9, subsection 3,and in computing the income for the taxable year or years for which a net operating loss isdeducted.For purposes of this subsection, the term “held” shall be determined with reference to

the holding period provisions of section 1223 of the Internal Revenue Code and the federalregulations adopted pursuant thereto.e. (1) To the extent not already excluded, fifty percent of the net capital gain from the sale

or exchange of employer securities of an Iowa corporation to a qualified Iowa employee stockownership plan when, upon completion of the transaction, the qualified Iowa employee stockownership plan owns at least thirty percent of all outstanding employer securities issued bythe Iowa corporation.(2) For purposes of this paragraph:(a) “Employer securities” means the same as defined in section 409(l) of the Internal

Revenue Code.(b) “Iowa corporation” means a corporation whose commercial domicile, as defined in

section 422.32, is in this state.(c) “Qualified Iowa employee stock ownership plan”means an employee stock ownership

plan, as defined in section 4975(e)(7) of the Internal Revenue Code, and trust that areestablished by an Iowa corporation for the benefit of the employees of the corporation.22. Subtract, to the extent included, the amounts paid to an eligible individual under

section 105 of the Civil Liberties Act of 1988, Pub. L. No. 100-383, Tit. I, as satisfactionfor a claim against the United States arising out of the confinement, holding in custody,relocation, or other deprivation of liberty or property of an individual of Japanese ancestry.23. Subtract, to the extent included, the amount of federal Segal AmeriCorps education

award payments.24. Subtract, to the extent included, active duty pay received by a person in the national

guard or armed forces military reserve for services performed on or after August 2, 1990,pursuant to military orders related to the Persian Gulf Conflict.25. Subtract, to the extent included, active duty pay received by a person in the national

guard or armed forces military reserve for service performed on or after November 21, 1995,pursuant to military orders related to peacekeeping in Bosnia-Herzegovina.26. Add depreciation taken for federal income tax purposes on a speculative shell

building defined in section 427.1, subsection 27, which is owned by a for-profit entity and thefor-profit entity is receiving the proper tax exemption. Subtract depreciation computed as ifthe speculative shell building were classified as fifteen-year property under the acceleratedcost recovery system of the Internal Revenue Code during the period during which it isowned by the for-profit entity and is receiving the property tax exemption. However, thissubsection does not apply to a speculative shell building which is used by the for-profitentity, subsidiary of the for-profit entity, or majority owners of the for-profit entity, for otherthan as a speculative shell building, as defined in section 427.1, subsection 27.27. Subtract, to the extent included, payments received by an individual providing

unskilled in-home health-related care services pursuant to section 249.3, subsection 2,paragraph “a”, subparagraph (2), to a member of the individual caregiver’s family. Forpurposes of this subsection, a member of the individual caregiver’s family includes a spouse,parent, stepparent, child, stepchild, brother, stepbrother, sister, stepsister, lineal ancestor, orlineal descendant, and such persons by marriage or adoption. A health care professionallicensed by an examination board designated in section 147.13, subsections 1 through 10, isnot eligible for the exemption authorized in this subsection.28. If the taxpayer is owner of an individual development account certified under chapter

541A at any time during the tax year, deductions of all of the following shall be allowed:














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a. Contributions made to the account by persons and entities, other than the taxpayer, asauthorized in chapter 541A.b. The amount of any state match payments authorized under section 541A.3, subsection

1.c. Earnings from the account.29. Subtract, to the extent not otherwise deducted in computing adjusted gross income,

the amounts paid by the taxpayer for the purchase of health benefits coverage or insurancefor the taxpayer or taxpayer’s spouse or dependent.30. Subtract the amount of the employer social security credit allowable for the tax year

under section 45B of the Internal Revenue Code to the extent that the credit increases federaladjusted gross income.31. For a person who is disabled, or is fifty-five years of age or older, or is the surviving

spouse of an individual or a survivor having an insurable interest in an individual whowould have qualified for the exemption under this subsection for the tax year, subtract, tothe extent included, the total amount of a governmental or other pension or retirementpay, including, but not limited to, defined benefit or defined contribution plans, annuities,individual retirement accounts, plans maintained or contributed to by an employer, ormaintained or contributed to by a self-employed person as an employer, and deferredcompensation plans or any earnings attributable to the deferred compensation plans, up toa maximum of six thousand dollars for a person, other than a husband or wife, who filesa separate state income tax return and up to a maximum of twelve thousand dollars for ahusband and wife who file a joint state income tax return. However, a surviving spouse whois not disabled or fifty-five years of age or older can only exclude the amount of pension orretirement pay received as a result of the death of the other spouse. A husband and wifefiling separate state income tax returns or separately on a combined state return are alloweda combined maximum exclusion under this subsection of up to twelve thousand dollars. Thetwelve thousand dollar exclusion shall be allocated to the husband or wife in the proportionthat each spouse’s respective pension and retirement pay received bears to total combinedpension and retirement pay received.31A. a. Subtract, to the extent included, retirement pay received by a taxpayer from the

federal government for military service performed in the armed forces, the armed forcesmilitary reserve, or national guard.b. The exclusion of retirement pay under this subsection is in addition to any exclusion

provided under subsection 31.31B. a. Subtract, to the extent included, amounts received as survivor benefits by a

taxpayer from the federal government pursuant to 10 U.S.C. §1447, et seq.b. The exclusion of survivor benefits under this subsection is in addition to any exclusion

provided under subsection 31.32. a. Subtract the maximum contribution that may be deducted for Iowa income tax

purposes as a participant in the Iowa educational savings plan trust pursuant to section 12D.3,subsection 1. For purposes of this paragraph, a participant who makes a contribution on orbefore the date prescribed in section 422.21 for making and filing an individual income taxreturn, excluding extensions, may elect to be deemed to have made the contribution on thelast day of the preceding calendar year. The director, after consultation with the treasurer ofstate, shall prescribe by rule the manner and method by which a participant may make anelection authorized by the preceding sentence.b. Add the amount resulting from the cancellation of a participation agreement refunded

to the taxpayer as a participant in the Iowa educational savings plan trust to the extentpreviously deducted as a contribution to the trust.c. (1) Add, to the extent previously deducted as a contribution to the trust, the amount

resulting from a withdrawal or transfer made by the taxpayer from the Iowa educationalsavings plan trust for purposes other than any of the following:(a) The payment of qualified higher education expenses.(b) The payment of tuition to an elementary or secondary school if the tuition amounts

are qualified education expenses.(c) A change in beneficiaries under, or transfer to another account within, the Iowa















educational savings plan trust, or a transfer to the Iowa ABLE savings plan trust, providedsuch change or transfer is permitted under section 12D.6, subsection 5.(2) For purposes of this paragraph:(a) “Elementary or secondary school” means an elementary or secondary school in this

state which is accredited under section 256.11, and adheres to the provisions of the federalCivil Rights Act of 1964 and chapter 216.(b) “Qualified education expenses” and “tuition” all mean the same as defined in section

12D.1, subsection 2.(c) (i) “Qualified higher education expenses” means the same as defined in section

529(e)(3) of the Internal Revenue Code.(ii) For purposes of this subparagraph division (c), “Internal Revenue Code” means the

Internal Revenue Code of 1954, prior to the date of its redesignation as the Internal RevenueCode of 1986 by the Tax Reform Act of 1986, or means the Internal Revenue Code of 1986 asamended and in effect on January 1, 2018. This definition shall not be construed to includeany amendment to the Internal RevenueCode enacted after the date specified in the precedingsentence, including any amendment with retroactive applicability or effectiveness.33. Subtract, to the extent included, income from interest and earnings received from the

Iowa educational savings plan trust created in chapter 12D.34. a. (1) Subtract the amount contributed during the tax year on behalf of a designated

beneficiary that is a resident of this state to the IowaABLE savings plan trust or to the qualifiedABLE program with which the state has contracted pursuant to section 12I.10, not to exceedthe maximum contribution level established in section 12I.3, subsection 1, paragraph “d”, orsection 12I.10, subsection 2, paragraph “a”, as applicable.(2) This paragraph “a” shall not apply to any amount of contribution that represents a

transfer from the Iowa educational savings plan trust created in chapter 12D that meets therequirements of subsection 32, paragraph “c”, subparagraph (1), subparagraph division (c),and that was previously deducted as a contribution to the Iowa educational savings plan trust.b. Add the amount resulting from the cancellation of a participation agreement refunded

to the taxpayer as an account owner in the Iowa ABLE savings plan trust or the qualifiedABLE program with which the state has contracted pursuant to section 12I.10 to the extentpreviously deducted pursuant to this subsection by the taxpayer or any other personas a contribution to the trust or qualified ABLE program, or to the extent the amountwas previously deducted by the taxpayer or any other person pursuant to subsection 32,paragraph “a”, and qualified as a transfer under paragraph “a”, subparagraph (2), of thissubsection.c. Add the amount resulting from a withdrawal made by a taxpayer from the Iowa

ABLE savings plan trust or the qualified ABLE program with which the state has contractedpursuant to section 12I.10 for purposes other than the payment of qualified disabilityexpenses to the extent previously deducted pursuant to this subsection by the taxpayeror any other person as a contribution to the trust or qualified ABLE program, or to theextent the amount was previously deducted by the taxpayer or any other person pursuant tosubsection 32, paragraph “a”, and qualified as a transfer under paragraph “a”, subparagraph(2), of this subsection.34A. Subtract, to the extent included, income from interest and earnings received from

the Iowa ABLE savings plan trust created in chapter 12I, or received by a resident accountowner from a qualified ABLE programwithwhich the state has contracted pursuant to section12I.10.35. Subtract, to the extent included, the following:a. Payments made to the taxpayer because of the taxpayer’s status as a victim of

persecution for racial, ethnic, or religious reasons by Nazi Germany or any other Axisregime or as an heir of such victim.b. Items of income attributable to, derived from, or in any way related to assets stolen

from, hidden from, or otherwise lost to a victim of persecution for racial, ethnic, or religiousreasons by Nazi Germany or any other Axis regime immediately prior to, during, andimmediately after World War II, including, but not limited to, interest on the proceedsreceivable as insurance under policies issued to a victim of persecution for racial, ethnic,







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or religious reasons by Nazi Germany or any other Axis regime by European insurancecompanies immediately prior to and during World War II. However, income from assetsacquired with such assets or with the proceeds from the sale of such assets shall not besubtracted. This paragraph shall only apply to a taxpayer who was the first recipient of suchassets after recovery of the assets and who is a victim of persecution for racial, ethnic, orreligious reasons by Nazi Germany or any other Axis regime or is an heir of such victim.36. Add, to the extent not already included, income from the sale of obligations of the

state and its political subdivisions. Income from the sale of these obligations is exempt fromthe taxes imposed by this division only if the law authorizing these obligations specificallyexempts the income from the sale from the state individual income tax.37. a. Notwithstanding the method for computing income from an installment sale under

section 453 of the Internal Revenue Code, as defined in section 422.3, the method to be usedin computing income from an installment sale shall be the method under section 453 of theInternal Revenue Code, as amended up to and including January 1, 2000. A taxpayer affectedby this subsection shall make adjustments in the adjusted gross income pursuant to rulesadopted by the director.b. The adjustment to net income provided in this subsection is repealed for tax years

beginning on or after January 1, 2002. However, to the extent that a taxpayer using theaccrual method of accounting reported the entire capital gain from the sale or exchange ofproperty on the Iowa return for the tax year beginning in the 2001 calendar year and thecapital gain was reported on the installment method on the federal income tax return, anyadditional installment from the capital gain reported for federal income tax purposes is notto be included in net income in tax years beginning on or after January 1, 2002.38. Subtract, to the extent not otherwise excluded, the amount of withdrawals from

qualified retirement plan accounts made during the tax year if the taxpayer or taxpayer’sspouse is a member of the Iowa national guard or reserve forces of the United States whois ordered to national guard duty or federal active duty. In addition, a penalty for suchwithdrawals shall not be assessed by the state.39. a. The additional first-year depreciation allowance authorized in section 168(k) of the

Internal Revenue Code, as enacted by Pub. L. No. 107-147, §101, does not apply in computingnet income for state tax purposes. If the taxpayer has taken such deduction in computingfederal adjusted gross income, the following adjustments shall be made:(1) Add the total amount of depreciation taken on all property for which the election under

section 168(k) of the Internal Revenue Code was made for the tax year.(2) Subtract an amount equal to depreciation allowed on such property for the tax year

using the modified accelerated cost recovery system depreciation method applicable undersection 168 of the Internal Revenue Code without regard to section 168(k).(3) Any other adjustments to gains or losses to reflect the adjustments made in

subparagraphs (1) and (2) pursuant to rules adopted by the director.b. A taxpayer may elect to apply the additional first-year depreciation allowance

authorized in section 168(k)(4) of the Internal Revenue Code, as enacted by Pub. L. No.108-27, in computing net income for state tax purposes, for qualified property acquiredafter May 5, 2003, and before January 1, 2005. If the taxpayer elects to take the additionalfirst-year depreciation allowance authorized in section 168(k)(4) of the Internal RevenueCode for state tax purposes, the deduction may be taken on amended state tax returns,if necessary. If the taxpayer does not elect to take the additional first-year depreciationallowance authorized in section 168(k)(4) of the Internal Revenue Code for state taxpurposes, the following adjustment shall be made:(1) Add the total amount of depreciation taken on all property for which the election under

section 168(k)(4) of the Internal Revenue Code was made for the tax year.(2) Subtract an amount equal to depreciation allowed on such property for the tax year

using the modified accelerated cost recovery system depreciation method applicable undersection 168 of the Internal Revenue Code without regard to section 168(k)(4).(3) Any other adjustments to gains or losses to reflect the adjustments made in

subparagraphs (1) and (2) pursuant to rules adopted by the director.39A. The additional first-year depreciation allowance authorized in section 168(k) of the







Internal Revenue Code does not apply in computing net income for state tax purposes. If thetaxpayer has taken the additional first-year depreciation allowance for purposes of computingfederal adjusted gross income, then the taxpayer shall make the following adjustments tofederal adjusted gross income when computing net income for state tax purposes:a. Add the total amount of depreciation taken under section 168(k) of the Internal Revenue

Code for the tax year.b. Subtract the amount of depreciation allowable under the modified accelerated cost

recovery system described in section 168 of the Internal Revenue Code and calculatedwithoutregard to section 168(k).c. Any other adjustments to gains or losses necessary to reflect the adjustments made

in paragraphs “a” and “b”. The director shall adopt rules for the administration of thisparagraph.39B. The additional first-year depreciation allowance authorized in section 168(n) of

the Internal Revenue Code, as enacted by Pub. L. No. 110-343, §710, does not apply incomputing net income for state tax purposes. If the taxpayer has taken the additionalfirst-year depreciation allowance for purposes of computing federal adjusted gross income,then the taxpayer shall make the following adjustments to federal adjusted gross incomewhen computing net income for state tax purposes:a. Add the total amount of depreciation taken under section 168(n) of the Internal

Revenue Code for the tax year.b. Subtract the amount of depreciation allowable under the modified accelerated cost

recovery system described in section 168 of the Internal Revenue Code and calculatedwithoutregard to section 168(n).c. Any other adjustments to gains or losses necessary to reflect the adjustments made

in paragraphs “a” and “b”. The director shall adopt rules for the administration of thisparagraph.40. Subtract, to the extent included, active duty pay received by a person in the national

guard or armed forces military reserve for service performed on or after January 1, 2003,pursuant to military orders related to Operation Iraqi Freedom, Operation New Dawn,Operation Noble Eagle, and Operation Enduring Freedom.41. a. Subject to the restrictions in paragraph “b”, subtract the sum of the following

amounts:(1) The amount of contributions made by an account holder during the tax year to the

account holder’s first-time homebuyer savings accounts, not to exceed the following annuallimit:(a) (i) For married taxpayers who file a joint return and maintain a joint first-time

homebuyer savings account, four thousand dollars.(ii) For any other account holder, two thousand dollars.(b) For the tax year beginning in the 2018 calendar year and for each subsequent tax

year, the director shall multiply each dollar amount set forth in subparagraph division (a),subparagraph subdivisions (i) and (ii), by the latest cumulative inflation factor, shall round offthe resulting product to the nearest one dollar, and shall incorporate the result into the incometax forms and instructions for each tax year. For purposes of this subparagraph division,“cumulative inflation factor” means the product of the annual inflation factor for the 2018calendar year and all annual inflation factors for subsequent calendar years as determined bysection 422.4, subsection 1, paragraph “a”. The cumulative inflation factor applies to all taxyears beginning on or after January 1 of the calendar year for which the latest annual inflationfactor has been determined. Notwithstanding any other provision, the annual inflation factorfor the 2018 calendar year is one hundred percent.(2) To the extent included, income from interest received from the account holder’s

first-time homebuyer savings accounts.b. (1) The subtraction in paragraph “a” shall not exceed the following aggregate lifetime

limit:(a) Formarried taxpayers who file a joint return andmaintain a joint first-time homebuyer

savings account, an amount equal to the product of the deductible amount determined




for the year in paragraph “a”, subparagraph (1), subparagraph division (a), subparagraphsubdivision (i), multiplied by ten.(b) For any other account holder, an amount equal to the product of the deductible

amount determined for the year in paragraph “a”, subparagraph (1), subparagraph division(a), subparagraph subdivision (ii), multiplied by ten.(2) The subtraction in paragraph “a” shall not be allowed to an account holder upon one

of the following dates, whichever occurs first:(a) January 1 of the tenth calendar year after the calendar year during which the account

holder first opened a first-time homebuyer savings account.(b) The date on which funds within an account holder’s first-time homebuyer savings

account are withdrawn for purposes other than the payment or reimbursement of thedesignated beneficiary’s eligible home costs in connection with a qualified home purchase.Any amount transferred between different first-time homebuyer savings accounts of thesame account holder by a person other than the account holder shall not be considered awithdrawal for purposes of this subparagraph division (b).c. (1) Add, to the extent previously deducted under paragraph “a”, subparagraph (1),

the amount withdrawn during the tax year from an account holder’s first-time homebuyersavings account for purposes other than the payment or reimbursement of the designatedbeneficiary’s eligible home costs in connection with a qualified home purchase.(2) For purposes of this paragraph “c”, any amount remaining in an account holder’s

first-time homebuyer savings account on January 1 of the tenth calendar year after thecalendar year during which the account holder first opened a first-time homebuyer savingsaccount shall be considered immediately withdrawn under subparagraph (1).(3) For purposes of this paragraph “c”, the transfer of amounts between different first-time

homebuyer accounts of the same account holder by a person other than the account holdershall not cause such transfer to be considered a withdrawal under subparagraph (1).d. For any amount considered a withdrawal required to be added to net income pursuant

to paragraph “c”, the account holder shall be assessed a penalty equal to ten percent of theamount of the withdrawal. The penalty shall not apply to withdrawals made by reason of thedeath of the account holder, or to withdrawals made pursuant to a garnishment, levy, or otherorder, including but not limited to an order in bankruptcy following a filing for protectionunder the federal bankruptcy code, 11 U.S.C. §101 et seq.e. For purposes of this subsection, “account holder”, “designated beneficiary”, “eligible

home costs”, “first-time homebuyer savings account”, and “qualified home purchase” meanthe same as defined in section 541B.2.42. Subtract, to the extent included, military student loan repayments received by the

taxpayer serving on active duty in the national guard or armed forces military reserve or onactive duty status in the armed forces.42A. Subtract, to the extent included, all pay received by the taxpayer from the federal

government for military service performed while on active duty status in the armed forces,the armed forces military reserve, or the national guard.43. A taxpayer may elect not to take the increased expensing allowance under section

179 of the Internal Revenue Code, as amended by Pub. L. No. 108-27, §202, in computingadjusted gross income for state tax purposes. If the taxpayer does not take the increasedexpensing allowance under section 179 of the Internal Revenue Code for state tax purposes,the following adjustments shall be made:a. Add the total amount of expense deduction taken on section 179 property for federal

tax purposes under section 179 of the Internal Revenue Code.b. Subtract the amount of expense deduction on section 179 property allowable for federal

tax purposes under section 179 of the Internal Revenue Code prior to enactment of Pub. L.No. 108-27, §202.c. Any other adjustments to gains and losses to the adjustments made in paragraphs “a”

and “b” pursuant to rules adopted by the director.44. a. If the taxpayer, while living, donates one or more of the taxpayer’s human organs

to another human being for immediate human organ transplantation during the tax year,





subtract, to the extent not otherwise excluded, the following unreimbursed expenses incurredby the taxpayer and related to the taxpayer’s organ donation:(1) Travel expenses.(2) Lodging expenses.(3) Lost wages.b. The maximum amount that may be deducted under paragraph “a” is ten thousand

dollars. A taxpayer shall only take the deduction under this subsection once. If a deductionis taken under this subsection, the amount of expenses shall not be considered medical careexpenses under section 213 of the Internal Revenue Code for state tax purposes.c. For purposes of this subsection, “human organ” means all or part of a liver, pancreas,

kidney, intestine, lung, or bone marrow.45. Subtract, to the extent not otherwise deducted, the amount of two thousand dollars

for the cost of a clean fuel motor vehicle if the taxpayer was eligible for the alternative motorvehicle credit under section 30B of the Internal Revenue Code for such motor vehicle.46. Subtract, to the extent included, the amount of any grant provided pursuant to the

injured veterans grant program pursuant to section 35A.14.46A. Subtract, to the extent included, amounts received from the veterans trust fund for

any of the following items:a. Travel expenses pursuant to section 35A.13, subsection 6, paragraph “a”.b. Unemployment assistance pursuant to section 35A.13, subsection 6, paragraph “c”.47. Subtract, to the extent not otherwise deducted in computing adjusted gross income,

the amounts paid by the taxpayer to the department of veterans affairs for the purpose ofproviding grants under the injured veterans grant program established in section 35A.14.Amounts subtracted under this subsection shall not be used by the taxpayer in computing theamount of charitable contributions as defined by section 170 of the Internal Revenue Code.48. Reserved.49. Subtract, to the extent included, the amount of ordinary or capital gain realized by

the taxpayer as a result of the involuntary conversion of property due to eminent domain.However, if the total amount of such realized ordinary or capital gain is not recognizedbecause the converted property is replaced with property that is similar to, or related in useto, the converted property, the amount of such realized ordinary or capital gain shall notbe subtracted under this subsection until the remaining realized ordinary or capital gain issubject to federal taxation or until the time of disposition of the replacement property asprovided under rules of the director. The subtraction allowed under this subsection shall notalter the basis as established for federal tax purposes of any property owned by the taxpayer.50. Subtract, to the extent included, the amount of victim compensation awards paid

under the victim compensation program, victim restitution payments received pursuant tochapter 910 or 915, and any damages awarded by a court, and received by the taxpayer, in acivil action filed by the victim against the offender, during the tax year.51. a. Notwithstanding any other provision of law to the contrary, the increased

expensing allowance under section 179 of the Internal Revenue Code, as amended by Pub.L. No. 115-97, §13101, applies in computing net income for state tax purposes for tax yearsbeginning on or after January 1, 2018, subject to the limitations in this subsection for taxyears beginning prior to January 1, 2020.b. If the taxpayer has taken the increased expensing allowance under section 179 of the

Internal Revenue Code, as amended by Pub. L. No. 115-97, §13101, for purposes of computingfederal adjusted gross income for tax years beginning on or after January 1, 2018, but beforeJanuary 1, 2020, then the taxpayer shall make the following adjustments to federal adjustedgross income when computing net income for state tax purposes for the same tax year:(1) Add the total amount of expense deduction taken on section 179 property allowable

for federal tax purposes under section 179 of the Internal Revenue Code, as amended by Pub.L. No. 115-97, §13101.(2) (a) For tax years beginning on or after January 1, 2018, but before January 1, 2019,

subtract the amount of expense deduction on section 179 property allowable for federal taxpurposes under section 179 of the Internal Revenue Code, as amended by Pub. L. No. 115-97,§13101, not to exceed seventy thousand dollars. The subtraction in this subparagraph division
















shall be reduced, but not below zero, by the amount by which the total cost of section 179property placed in service by the taxpayer during the tax year exceeds two hundred eightythousand dollars.(b) For tax years beginning on or after January 1, 2019, but before January 1, 2020,

subtract the amount of expense deduction on section 179 property allowable for federal taxpurposes under section 179 of the Internal Revenue Code, as amended by Pub. L. No. 115-97,§13101, not to exceed one hundred thousand dollars. The subtraction in this subparagraphdivision shall be reduced, but not below zero, by the amount by which the total cost ofsection 179 property placed in service by the taxpayer during the tax year exceeds fourhundred thousand dollars.(3) Any other adjustments to gains or losses necessary to reflect adjustments made in

subparagraphs (1) and (2).c. The director shall adopt rules pursuant to chapter 17A to administer this subsection.52. a. For tax years beginning on or after January 1, 2018, but before January 1, 2020,

a taxpayer may elect to take advantage of this subsection in lieu of subsection 51, but onlyif the taxpayer’s total expensing allowance deduction for federal tax purposes under section179 of the Internal Revenue Code, as amended by Pub. L. No. 115-97, §13101, that is allocatedto the taxpayer from one or more partnerships, S corporations, or limited liability companieselecting to have the income taxed directly to the individual exceeds seventy thousand dollarsfor a tax year beginning during the 2018 calendar year, or exceeds one hundred thousanddollars for a tax year beginning during the 2019 calendar year, and would, except as providedin this subsection, be limited for purposes of computing net income for state tax purposespursuant to subsection 51.b. A taxpayer who elects to take advantage of this subsection shall make the following

adjustments to federal adjusted gross income when computing net income for state taxpurposes:(1) Add the total amount of section 179 expense deduction allocated to the taxpayer from

all partnerships, S corporations, or limited liability companies electing to have the incometaxed directly to the individual, to the extent the allocated amount was allowed as a deductionto the taxpayer for federal tax purposes for the tax year under section 179 of the InternalRevenue Code, as amended by Pub. L. No. 115-97, §13101.(2) From the amount added in subparagraph (1), do the following:(a) For tax years beginning on or after January 1, 2018, but before January 1, 2019,

subtract the first seventy thousand dollars of expensing allowance deduction on section 179property.(b) For tax years beginning on or after January 1, 2019, but before January 1, 2020,

subtract the first one hundred thousand dollars of expensing allowance deduction on section179 property.(3) The remaining amount, equal to the difference between the amount added in

subparagraph (1), and the amount subtracted in subparagraph (2), may be deducted by thetaxpayer but such deduction shall be amortized equally over five tax years beginning in thefollowing tax year.(4) Any other adjustments to gains or losses necessary to reflect adjustments made in

subparagraphs (1) through (3).c. A taxpayer who elects to take advantage of this subsection shall not take the increased

expensing allowance under section 179 of the Internal Revenue Code, as amended by Pub.L. No. 115-97, §13101, for any section 179 property placed in service by the taxpayer incomputing adjusted gross income for state tax purposes. If the taxpayer has taken any suchdeduction for purposes of computing federal adjusted gross income, the taxpayer shall makethe following adjustments to federal adjusted gross income when computing net income forstate tax purposes:(1) Add the total amount of expense deduction for federal tax purposes taken on section

179 property placed in service by the taxpayer under section 179 of the Internal RevenueCode, as amended by Pub. L. No. 115-97, §13101.(2) Subtract the amount of depreciation allowable on such property under the modified

accelerated cost recovery system described in section 168 of the Internal Revenue Code,











without regard to section 168(k) of the Internal Revenue Code. The taxpayer shall continueto take depreciation on the applicable property in future tax years to the extent allowedunder the modified accelerated cost recovery system described in section 168 of the InternalRevenue Code, without regard to section 168(k) of the Internal Revenue Code.(3) Any other adjustments to gains or losses necessary to reflect the adjustments made in

subparagraphs (1) and (2).d. The election made under this subsection is for one tax year and the taxpayer may elect

or not elect to take advantage of this subsection in any subsequent tax year. However, notelecting to take advantage of this subsection in a subsequent tax year shall not affect thetaxpayer’s ability to claim the tax deduction under paragraph “b”, subparagraph (3), thatoriginated from a previous tax year.e. The director shall adopt rules pursuant to chapter 17A to administer this subsection.53. A taxpayer is not allowed to take the increased expensing allowance under section

179 of the Internal Revenue Code, as amended by Pub. L. No. 111-5, §1202, in computingadjusted gross income for state tax purposes.54. Subtract, to the extent included, the amount of any biodiesel production refund

provided pursuant to section 423.4.55. A taxpayer is allowed to take the deduction for certain expenses of elementary and

secondary school teachers allowed under section 62(a)(2)(D) of the Internal RevenueCode, asamended by the federal Emergency Economic Stabilization Act of 2008, Pub. L. No. 110-343,in computing net income for state tax purposes.56. A taxpayer is allowed to take the deduction for qualified tuition and related expenses

allowed under section 222 of the Internal Revenue Code, as amended by the federalEmergency Economic Stabilization Act of 2008, Pub. L. No. 110-343, in computing netincome for state tax purposes.57. a. Subtract, to the extent included, payments received by an individual from an

electric utility for the following:(1) Emergency response work performed in this state for the electric utility pursuant to

a mutual aid agreement between this state and any other state if such emergency responsework is performed while the individual is a nonresident.(2) Training received in this state from the electric utility if such training is received while

the individual is a nonresident.b. For purposes of this subsection, “electric utility” means the same as defined in section

476.22.58. On the Iowa fiduciary income tax return, subtract the amount of administrative

expenses that were not taken or allowed as a deduction in calculating net income for federalfiduciary income tax purposes.[C35, §6943-f7; C39, §6943.039; C46, 50, 54, 58, 62, 66, 71, 73, 75, 77, 79, 81, §422.7; 81

Acts, ch 132, §4 – 6, 9 – 11; 82 Acts, ch 1023, §3 – 8, 25, 30, 31, ch 1203, §2]83 Acts, ch 174, §1, 3; 83 Acts, ch 179, §5, 6, 21, 24; 84 Acts, ch 1305, §29, 30; 85 Acts, ch

230, §4; 86 Acts, ch 1232, §2; 86 Acts, ch 1236, §5; 86 Acts, ch 1238, §18; 86 Acts, ch 1241, §14;86 Acts, ch 1243, §33; 87 Acts, 1st Ex, ch 1, §3; 87 Acts, 2nd Ex, ch 1, §4 – 6; 88 Acts, ch 1028,§13 – 15; 89 Acts, ch 175, §2; 89 Acts, ch 225, §18, 19; 89 Acts, ch 228, §6, 7, 11; 89 Acts, ch249, §2; 89 Acts, ch 251, §13; 89 Acts, ch 268, §4; 89 Acts, ch 285, §3; 90 Acts, ch 1171, §2; 90Acts, ch 1195, §1; 90 Acts, ch 1251, §52; 90 Acts, ch 1271, §1901, 1903; 91 Acts, ch 196, §2; 91Acts, ch 210, §1; 92 Acts, ch 1225, §1, 5; 92 Acts, ch 1247, §30, 31, 39; 93 Acts, ch 97, §14, 20;94 Acts, ch 1165, §12, 46; 94 Acts, ch 1166, §2, 3, 12; 94 Acts, ch 1183, §77 – 79, 97; 95 Acts, ch5, §1, 14; 95 Acts, ch 152, §3, 7; 95 Acts, ch 206, §1, 4; 96 Acts, ch 1106, §7; 96 Acts, ch 1129,§113; 96 Acts, ch 1186, §23; 97 Acts, ch 133, §1; 97 Acts, ch 135, §4, 9; 98 Acts, ch 1100, §57;98 Acts, ch 1172, §12, 14; 98 Acts, ch 1174, §5, 6; 98 Acts, ch 1177, §1 – 6; 2000 Acts, ch 1103,§2, 3; 2000 Acts, ch 1163, §5, 6; 2000 Acts, ch 1194, §8, 21; 2001 Acts, ch 15, §1, 2; 2001 Acts,ch 116, §6, 28; 2001 Acts, ch 127, §4, 5, 9, 10; 2001 Acts, 2nd Ex, ch 6, §21, 22, 25, 26, 37; 2002Acts, ch 1069, §4, 11, 14; 2002 Acts, ch 1150, §4; 2002 Acts, ch 1151, §5, 36; 2003 Acts, ch 139,§5, 11, 12; 2003 Acts, ch 142, §5, 6, 11; 2003 Acts, 1st Ex, ch 2, §184, 205; 2004 Acts, ch 1086,§66; 2004 Acts, 1st Ex, ch 1001, §38, 41, 42; 2005 Acts, ch 2, §1, 2, 6; 2005 Acts, ch 19, §53;2005 Acts, ch 24, §4, 10, 11; 2005 Acts, ch 127, §1, 2; 2006 Acts, ch 1013, §1, 2; 2006 Acts, ch




























































































1106, §2, 4; 2006 Acts, ch 1112, §4, 5; 2006 Acts, ch 1140, §4, 10, 11; 2006 Acts, ch 1158, §12;2006 Acts, ch 1179, §71; 2006 Acts, 1st Ex, ch 1001, §41, 49; 2007 Acts, ch 27, §2, 11; 2007Acts, ch 54, §35; 2007 Acts, ch 162, §4, 13; 2007 Acts, ch 176, §2, 4; 2007 Acts, ch 186, §8; 2008Acts, ch 1011, §4, 9; 2008 Acts, ch 1131, §2 – 4; 2008 Acts, ch 1178, §8, 17; 2009 Acts, ch 118,§6, 12; 2009 Acts, ch 133, §136 – 139; 2009 Acts, ch 161, §3, 4; 2010 Acts, ch 1107, §1, 2; 2011Acts, ch 41, §2, 5, 7, 18, 19, 23 – 25; 2011 Acts, ch 105, §1 – 3; 2011 Acts, ch 113, §57, 60; 2011Acts, ch 131, §137, 139, 140, 142; 2012 Acts, ch 1019, §129; 2012 Acts, ch 1021, §73; 2012 Acts,ch 1059, §12; 2012 Acts, ch 1072, §37; 2012 Acts, ch 1110, §7; 2012 Acts, ch 1123, §1, 32; 2012Acts, ch 1136, §33, 39 – 41; 2012 Acts, ch 1138, §133, 134; 2013 Acts, ch 1, §9, 11, 12; 2013Acts, ch 70, §1, 2; 2013 Acts, ch 100, §23, 27; 2014 Acts, ch 1080, §85, 98; 2014 Acts, ch 1093,§19, 21; 2014 Acts, ch 1116, §3 – 5; 2015 Acts, ch 1, §9, 11, 12; 2015 Acts, ch 116, §27, 29, 30;2015 Acts, ch 125, §1, 7; 2015 Acts, ch 137, §87, 91, 162; 2015 Acts, ch 138, §72, 73, 161; 2016Acts, ch 1011, §68; 2017 Acts, ch 116, §1, 10; 2017 Acts, ch 170, §37, 45; 2018 Acts, ch 1026,§129; 2018 Acts, ch 1161, §58, 65, 67, 75, 76, 97, 98, 144, 145, 147, 148; 2019 Acts, ch 46, §3Referred to in §8.57E, 12D.9, 12I.8, 12I.10, 217.39, 422.4, 422.5, 422.8, 422.9, 422.16, 422.35, 425.17, 541A.2, 541A.3, 541B.6For future amendments to this section, effective on or after January 1, 2023, contingent upon meeting certain net general fund revenue

criteria, see 2018 Acts, ch 1161, §108 – 118, 133, 134; 2019 Acts, ch 162, §12015 amendment to subsection 32, paragraph a, takes effect July 2, 2015, and applies retroactively to January 1, 2015, for tax years

beginning on or after that date; 2015 Acts, ch 138, §73, 161Subsections 34 and 34A apply to tax years beginning on or after January 1, 2016; 2015 Acts, ch 137, §912015 amendment to subsection 39A takes effect February 17, 2015, and applies retroactively to January 1, 2014, for tax years ending on

or after that date; 2015 Acts, ch 1, §11, 12Subsection 57 takes effect June 18, 2015, and applies retroactively to January 1, 2015, for tax years beginning on or after that date; 2015

Acts, ch 116, §29, 30Subsection 58 applies to Iowa fiduciary income tax returns filed for tax years ending on or after July 1, 2015; 2015 Acts, ch 125, §7For provisions relating to the disallowance of additional first-year depreciation under §168(k) of the Internal Revenue Code for tax years

ending on or after January 1, 2015, see 2016 Acts, ch 1007, §3 – 5; 2017 Acts, ch 157, §11 – 13Subsection 41 applies to tax years beginning on or after January 1, 2018; 2017 Acts, ch 116, §10; 2017 Acts, ch 170, §452018 amendment to subsection 32, paragraph c, applies retroactively to January 1, 2018, for withdrawals from the Iowa educational

savings plan trust made on or after that date; 2018 Acts, ch 1161, §1482018 amendment to subsection 34 applies retroactively to January 1, 2018, for withdrawals from the Iowa educational savings plan trust

made on or after that date; 2018 Acts, ch 1161, §1482018 amendment to subsection 39A, unnumbered paragraph 1 effective January 1, 2019, and applies to tax years beginning on or after

that date; 2018 Acts, ch 1161, §97, 98Subsections 51 and 52 apply retroactively to January 1, 2018, for tax years beginning on or after that date; 2018 Acts, ch 1161, §67Exclusion of certain qualified charitable distributions from individual retirement plans when computing net income for tax years

beginning during the 2018 calendar year; 2018 Acts, ch 1161, §60, 66Subsection 59, applicable to tax years beginning January 1, 2019, stricken per its own terms, effective January 1, 2020, for tax years

beginning on or after that date; 2018 Acts, ch 1161, §76, 97, 98.Subsection 2, paragraph v strickenSubsection 59 stricken per its own terms

422.8 Allocation of income earned in Iowa and other states.Under rules prescribed by the director, net income of individuals, estates, and trusts shall

be allocated as follows:1. The amount of income tax paid to another state or foreign country by a resident

taxpayer of this state on income derived from sources outside of Iowa shall be allowed as acredit against the tax computed under this chapter, except that the credit shall not exceedwhat the amount of the Iowa tax would have been on the same income which was taxed bythe other state or foreign country. The limitation on this credit shall be computed accordingto the following formula: Income earned outside of Iowa and taxed by another state orforeign country shall be divided by the total income of the resident taxpayer of Iowa. Thisquotient multiplied times the net Iowa tax as determined on the total income of the taxpayeras if entirely earned in Iowa shall be the maximum tax credit against the Iowa net tax.2. a. Nonresident’s net income allocated to Iowa is the net income, or portion of net

income, which is derived from a business, trade, profession, or occupation carried onwithin this state or income from any property, trust, estate, or other source within Iowa.However, income derived from a business, trade, profession, or occupation carried on withinthis state and income from any property, trust, estate, or other source within Iowa shallnot include distributions from pensions, including defined benefit or defined contributionplans, annuities, individual retirement accounts, and deferred compensation plans or anyearnings attributable thereto so long as the distribution is directly related to an individual’sdocumented retirement and received while the individual is a nonresident of this state. Ifa business, trade, profession, or occupation is carried on partly within and partly withoutthe state, only the portion of the net income which is fairly and equitably attributable to




























































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that part of the business, trade, profession, or occupation carried on within the state isallocated to Iowa for purposes of section 422.5, subsection 1, paragraph “b”, and section422.13 and income from any property, trust, estate, or other source partly within and partlywithout the state is allocated to Iowa in the same manner, except that annuities, interest onbank deposits and interest-bearing obligations, and dividends are allocated to Iowa onlyto the extent to which they are derived from a business, trade, profession, or occupationcarried on within the state. Net income described in section 29C.24, subsection 3, paragraph“a”, subparagraph (3), and paragraph “b”, subparagraph (2), shall not be allocated andapportioned to the state, as provided in section 29C.24.b. A resident’s income, or the income of an estate or trust with a situs in Iowa, allocable to

Iowa is the income determined under section 422.7 reduced by items of income and expensesfrom an S corporation that carries on business within and without the state when those itemsof income and expenses pass directly to the shareholders under provisions of the InternalRevenue Code. These items of income and expenses are increased by the greater of thefollowing:(1) The net income or loss of the corporation which is fairly and equitably attributable to

this state under section 422.33, subsections 2 and 3.(2) Any cash or the value of property distributions which are made only to the extent that

they are paid from income upon which Iowa income tax has not been paid, as determinedunder rules of the director, reduced by the amount of any of these distributions that are madeto enable the shareholder to pay federal income tax on items of income, loss, and expensesfrom the corporation.3. Taxable income of resident and nonresident estates and trusts shall be allocated in the

same manner as individuals.4. The amount of minimum tax paid to another state or foreign country by a resident

taxpayer of this state from preference items derived from sources outside of Iowa shall beallowed as a credit against the tax computed under this division except that the credit shallnot exceed what the amount of state alternative minimum tax would have been on the samepreference items which were taxed by the other state or foreign country. The limitation onthis credit shall be computed according to the following formula: The total of preferenceitems earned outside of Iowa and taxed by another state or foreign country shall be dividedby the total of preference items of the resident taxpayer of Iowa. In computing this quotient,those items excludable under section 422.5, subsection 2, paragraph “b”, subparagraph (1),shall not be used in computing the preference items. This quotient multiplied times the netstate alternative minimum tax as determined in section 422.5, subsection 2, on the total ofpreference items as if entirely earned in Iowa shall be the maximum tax credit against theIowa alternative minimum tax. However, the maximum tax credit will not be allowed to theextent that the minimum tax imposed by the other state or foreign country is less than themaximum tax credit computed above.5. a. The director may, in accordance with the provisions of this subsection, and

when cost-efficient, administratively feasible, and of mutual benefit to both states, enterinto reciprocal agreements with tax administration agencies of other states to furthertax administration and eliminate duplicate withholding by exempting from Iowa taxationincome earned from personal services in Iowa by residents of another state, if the otherstate provides a tax exemption for the same type of income earned from personal servicesby Iowa residents in the other state. For purposes of this subsection, “income earned frompersonal services” means wages, salaries, commissions, and tips, and earned income fromother sources. This subsection does not authorize the department to withhold taxes ondeferred compensation payments, pension distributions, and annuity payments when paidto a nonresident of the state of Iowa. All the terms of the agreements shall be described inthe rules adopted by the department.b. A reciprocal agreement entered into on or after April 4, 2002, with a tax administration

agency of another state shall not take effect until such agreement has been authorized by aconstitutional majority of each house of the general assembly and approved by the governor.A reciprocal agreement in effect on or after January 1, 2002, shall not be terminated by thestate of Iowa unless the termination has been authorized by a constitutional majority of each
















house of the general assembly and approved by the governor. An amendment to an existingreciprocal agreement does not constitute a new agreement.6. If the resident or part-year resident is a shareholder of an S corporation which has in

effect an election under subchapter S of the Internal Revenue Code, subsections 1 and 3 donot apply to any income taxes paid to another state or foreign country on the income from thecorporation which has in effect an election under subchapter S of the Internal Revenue Code.[C35, §6943-f8; C39, §6943.037, 6943.040, 6943.050; C46, 50, 54, 58, §422.5, 422.8, 422.18;

C62, 66, 71, 73, 75, 77, 79, 81, §422.5, 422.8; 82 Acts, ch 1226, §3, 6]83 Acts, ch 16, §1, 2; 85 Acts, ch 243, §3; 88 Acts, ch 1028, §16; 92 Acts, ch 1224, §1, 2, 4; 94

Acts, ch 1149, §1, 2; 96 Acts, ch 1197, §16 – 18; 97 Acts, ch 111, §5, 6, 8; 2002 Acts, ch 1005,§10, 11; 2002 Acts, ch 1069, §5, 12, 14; 2009 Acts, ch 133, §242; 2011 Acts, ch 25, §143; 2013Acts, ch 140, §121, 123, 124; 2016 Acts, ch 1095, §3, 14, 15; 2018 Acts, ch 1161, §77, 97, 98Referred to in §2.48, 29C.24, 260E.2, 422.5, 422.9, 422.12B, 422.13, 422.16For future strike of subsection 4, effective on or after January 1, 2023, contingent upon meeting certain net general fund revenue criteria,

see 2018 Acts, ch 1161, §119, 133, 1342016 amendment to subsection 2, paragraph a, takes effect April 21, 2016, and applies retroactively to January 1, 2016, for tax years

beginning on or after that date; 2016 Acts, ch 1095, §14, 15

422.9 Deductions from net income.In computing taxable income of individuals, there shall be deducted from net income the

larger of the amounts computed under subsection 1 or 2, plus the amount computed undersubsection 2A.1. An optional standard deduction, after deduction of federal income tax, equal to one

thousand two hundred thirty dollars for a married person who files separately or a singleperson or equal to three thousand thirty dollars for a husband and wife who file a joint return,a surviving spouse, or a head of household. The optional standard deduction shall not exceedthe amount remaining after deduction of the federal income tax. The amount of federalincome tax deducted shall be computed as provided in subsection 2, paragraph “b”.2. The total of contributions, interest, taxes, medical expense, nonbusiness losses, and

miscellaneous expenses deductible for federal income tax purposes under the InternalRevenue Code, with the following adjustments:a. Subtract the deduction for Iowa income taxes.b. Add the amount of federal income taxes paid or accrued, as the case may be, during

the tax year and subtract any federal income tax refunds received during the tax year. Wheremarried persons, who have filed a joint federal income tax return, file separately, such totalshall be divided between them according to the portion of the total paid or accrued, as thecase may be, by each. Federal income taxes paid for a tax year in which an Iowa return wasnot required to be filed shall not be added and federal income tax refunds received from atax year in which an Iowa return was not required to be filed shall not be subtracted.c. Add the amount by which expenses paid or incurred in connection with the adoption

of a child by the taxpayer exceed three percent of the net income of the taxpayer, or of thetaxpayer and spouse in the case of a joint return. The expenses may include medical andhospital expenses of the biological mother which are incident to the child’s birth and arepaid by the taxpayer, welfare agency fees, legal fees, and all other fees and costs relating tothe adoption of a child if the child is placed by an adoption service provider according to theprovisions of chapter 600. If the taxpayer claims an adoption tax credit under section 422.12A,the taxpayer shall recompute for purposes of this subsection the amount of the deduction byexcluding the amount of qualified adoption expenses, as defined in section 422.12A, used incomputing the adoption tax credit.d. Add an additional deduction for mileage incurred by the taxpayer in voluntary

work for a charitable organization consisting of the excess of the state employee mileagereimbursement over the amount deductible for federal income tax purposes. The deductionshall be proven by the keeping of a contemporaneous diary by the person throughout theperiod of the voluntary work in the tax year.e. Add the amount, not to exceed five thousand dollars, of expenses not otherwise

deductible under this section actually incurred in the home of the taxpayer for the care of aperson who is the grandchild, child, parent, or grandparent of the taxpayer or the taxpayer’s








































spouse and who is unable, by reason of physical or mental disability, to live independentlyand is receiving, or would be eligible to receive if living in a health care facility licensedunder chapter 135C, medical assistance benefits under chapter 249A. In the event that theperson being cared for is receiving assistance benefits under chapter 239B, the expenses nototherwise deductible shall be the net difference between the expenses actually incurred incaring for the person and the assistance benefits received under chapter 239B.f. Add the amount of the mortgage interest credit allowable for the tax year under section

25 of the Internal Revenue Code to the extent the credit decreased the amount of interestdeductible under section 163(g) of the Internal Revenue Code.g. If the taxpayer has a deduction for medical care expenses under section 213 of the

Internal Revenue Code, the taxpayer shall recompute for the purposes of this subsection theamount of the deduction under section 213 by excluding from medical care, as defined insection 213, the amount subtracted under section 422.7, subsection 29.h. For purposes of calculating the deductions in this subsection that are authorized under

the Internal Revenue Code, and to the extent that any of such deductions is determined byan individual’s federal adjusted gross income, the individual’s federal adjusted gross incomeis computed in accordance with section 422.7, subsections 39, 39A, 39B, 51, 52, and 53.i. The deduction for state sales and use taxes is allowable only if the taxpayer elected to

deduct the state sales and use taxes in lieu of state income taxes under section 164 of theInternal Revenue Code. A deduction for state sales and use taxes is not allowed if the taxpayerhas taken the deduction for state income taxes or claimed the standard deduction undersection 63 of the Internal Revenue Code. This paragraph applies to taxable years beginningafter December 31, 2018.j. Subtract charitable contributions under section 170 of the Internal Revenue Code to the

extent such contribution was made to an organization for the purpose of deposit in the Iowaeducation savings plan trust established in chapter 12D, and the taxpayer designated that anypart of the contribution be used for the direct benefit of any dependent of the taxpayer or anyother single beneficiary designated by the taxpayer.k. Subtract interest, taxes, and other miscellaneous expenses deductible for federal

income tax purposes to the extent such amounts are eligible home costs in connection with aqualified home purchase that were paid or reimbursed from funds in a first-time homebuyersavings account. For purposes of this paragraph, “eligible home costs”, “first-time homebuyersavings account”, and “qualified home purchase”mean the same as defined in section 541B.2.l. The limitation on the deduction of certain taxes in section 164(b)(6) of the Internal

Revenue Code does not apply in computing taxable income for state tax purposes. Ataxpayer is allowed to deduct taxes in computing taxable income as otherwise provided inthis subsection without regard to section 164(b)(6), as enacted by Pub. L. No. 115-97, §11042.2A. a. The following percentage of the qualified business income deductions under

sections 199A(a) and 199A(g) of the Internal Revenue Code taken and allowable incalculating federal taxable income for the applicable tax year:(1) For tax years beginning on or after January 1, 2019, but before January 1, 2021,

twenty-five percent.(2) For tax years beginning during the 2021 calendar year, fifty percent.(3) For tax years beginning on or after January 1, 2022, seventy-five percent.b. Notwithstanding paragraph “a”, and section 422.4, subsection 16, paragraph “e”, for

an entity electing or required to file a composite return under section 422.13, subsection 5,the deduction allowed under this subsection for purposes of the composite return shall be anamount equal to the applicable percentage described in paragraph “a” of the deductions thatwould be allowable for federal income tax purposes under sections 199A(a) and 199A(g) ofthe Internal Revenue Code by an individual taxpayer reporting the same items of income andloss that are included in the composite return.3. If, after applying all of the adjustments provided for in section 422.7, the allocation

provisions of section 422.8, and the deductions allowable in this section subject to themodifications provided in section 172(d) of the Internal Revenue Code, the taxable incomeresults in a net operating loss, the net operating loss shall be deducted as follows:a. The Iowa net operating loss shall be carried back three taxable years for an individual


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taxpayer with a casualty or theft property loss or for a net operating loss in a presidentiallydeclared disaster area incurred by a taxpayer engaged in a small business or in the tradeor business of farming. For all other Iowa net operating losses, the net operating loss shallbe carried back two taxable years or to the taxable year in which the taxpayer first earnedincome in Iowa whichever year is the later.b. The Iowa net operating loss remaining after being carried back as required in

paragraph “a” or “d” or if not required to be carried back shall be carried forward twentytaxable years.c. If the election under section 172(b)(3) of the Internal Revenue Code is made, the Iowa

net operating loss shall be carried forward twenty taxable years.d. Notwithstanding paragraph “a”, for a taxpayer who is engaged in the trade or business

of farming as defined in section 263A(e)(4) of the Internal Revenue Code and has a lossfrom farming as defined in section 172(b)(1)(B) of the Internal Revenue Code includingmodifications prescribed by rule by the director, the Iowa loss from the trade or business offarming is a net operating loss which may be carried back five taxable years prior to thetaxable year of the loss.4. Where married persons file separately, both must use the optional standard deduction

if either elects to use it, and both must claim itemized deductions if either elects to claimitemized deductions.5. A taxpayer affected by section 422.8 shall be permitted to deduct only such portion of

the total referred to in subsections 2 and 2A as is fairly and equitably allocable to Iowa underthe rules prescribed by the director.[C35, §6943-f9; C39, §6943.041; C46, 50, 54, 58, 62, 66, 71, 73, 75, 77, 79, 81, §422.9; 82

Acts, ch 1023, §9, 10, 30, 32, ch 1192, §1, 2, ch 1226, §4, 6]83 Acts, ch 179, §7, 22; 84 Acts, ch 1305, §31; 87 Acts, ch 233, §493; 87 Acts, 2nd Ex, ch 1,

§7 – 9; 88 Acts, ch 1028, §17 – 20; 89 Acts, ch 268, §5; 91 Acts, ch 159, §9; 91 Acts, ch 210, §2;92 Acts, ch 1222, §4, 6; 94 Acts, ch 1046, §9; 94 Acts, ch 1166, §4 – 6, 12; 95 Acts, ch 5, §2, 14;96 Acts, ch 1168, §1, 3; 97 Acts, ch 41, §32; 97 Acts, ch 135, §5, 9; 98 Acts, ch 1078, §5, 12; 99Acts, ch 95, §5, 6, 12, 13; 99 Acts, ch 114, §25; 2001 Acts, ch 132, §22, 24; 2001 Acts, 1st Ex,ch 3, §1, 2; 2002 Acts, ch 1069, §6, 13, 14; 2003 Acts, ch 139, §6, 11, 12; 2003 Acts, ch 142, §7,11; 2005 Acts, ch 24, §5, 10, 11; 2005 Acts, ch 140, §37 – 39, 73; 2006 Acts, ch 1158, §13; 2008Acts, ch 1027, §1, 3; 2009 Acts, ch 60, §4, 17; 2011 Acts, ch 41, §3, 5, 20, 23, 24; 2011 Acts,ch 131, §144, 146; 2013 Acts, ch 1, §3, 7, 8; 2013 Acts, ch 70, §3, 9; 2014 Acts, ch 1113, §2, 3;2015 Acts, ch 1, §3, 7, 8; 2016 Acts, ch 1107, §3, 5, 6; 2017 Acts, ch 113, §1; 2017 Acts, ch 116,§2, 10; 2018 Acts, ch 1161, §59, 65, 67, 78 – 84, 97, 98; 2019 Acts, ch 152, §2, 3, 15Referred to in §422.4, 422.5, 422.7(21)(d), 422.16, 422.21, 541B.6For future amendment to this section, effective on or after January 1, 2023, and contingent upon the meeting of certain net general fund

revenue criteria, see 2018 Acts, ch 1161, §120, 133, 1342015 amendment to subsection 2, paragraph i, takes effect February 17, 2015, and applies retroactively to January 1, 2014, for tax years

beginning on or after that date; 2015 Acts, ch 1, §7, 8For provisions relating to the deduction of state sales and use taxes for tax years beginning during the 2015 calendar year, see 2016 Acts,

ch 1007, §2, 4, 5For provisions relating to the determination of federal adjusted gross income for purposes of calculating deductions in light of the

disallowance of additional first-year depreciation under §168(k) of the Internal Revenue Code for tax years beginning during the 2015calendar year, see 2016 Acts, ch 1007, §3 – 5; 2017 Acts, ch 157, §11 – 13Subsection 2, paragraph j, takes effect May 25, 2016, and applies retroactively to January 1, 2016, for tax years beginning on or after

that date; 2016 Acts, ch 1107, §5, 6Subsection 2, paragraph k, applies to tax years beginning on or after January 1, 2018; 2017 Acts, ch 116, §102018 amendment to unnumbered paragraph 1 effective January 1, 2019, and applies to tax years beginning on or after that date; 2018

Acts, ch 1161, §97, 982018 amendment to subsection 2, paragraph h, applies retroactively to January 1, 2018, for tax years beginning on or after that date;

2018 Acts, ch 1161, §65, 672018 amendment to subsection 2, paragraph i, effective January 1, 2019, and applies to tax years beginning on or after that date; 2018

Acts, ch 1161, §97, 98Subsection 2, paragraph l, effective January 1, 2019, and applies to tax years beginning on or after that date; 2018 Acts, ch 1161, §97, 98Subsection 2A effective January 1, 2019, and applies to tax years beginning on or after that date; 2018 Acts, ch 1161, §97, 982018 amendment to subsection 3, paragraph d, effective January 1, 2019, and applies to tax years beginning on or after that date; 2018

Acts, ch 1161, §97, 982018 amendment to subsection 5 and strike of subsections 6 and 7 effective January 1, 2019, and apply to tax years beginning on or after

that date; 2018 Acts, ch 1161, §97, 98Deduction of sales and use tax in lieu of deduction for state and local income taxes in computing taxable income for tax years beginning

during the 2018 calendar year for persons who itemize deductions; 2018 Acts, ch 1161, §61, 66Teacher expense deduction for tax years beginning during the 2018 calendar year; 2018 Acts, ch 1161, §64, 662019 amendments to subsection 2A apply retroactively to January 1, 2019, for tax years beginning on or after that date; 2019 Acts, ch

152, §15









































































Subsection 2A, paragraph a, unnumbered paragraph 1 amendedSubsection 2A, paragraph b amended

422.10 Research activities credit.1. The taxes imposed under this division shall be reduced by a state tax credit for

increasing research activities in this state.a. An individual shall only be eligible for the credit provided in this section if the business

conducting the research meets all of the following requirements:(1) (a) The business is engaged in the manufacturing, life sciences, agriscience, software

engineering, or aviation and aerospace industry.(b) Persons that shall not be considered to be engaged in the manufacturing, life

sciences, agriscience, software engineering, or aviation and aerospace industry, and thus arenot eligible for the credit, include but are not limited to all of the following:(i) A person engaged in agricultural production as defined in section 423.1.(ii) A person who is a contractor, subcontractor, builder, or a contractor-retailer that

engages in commercial and residential repair and installation, including but not limitedto heating or cooling installation and repair, plumbing and pipe fitting, security systeminstallation, and electrical installation and repair. For purposes of this subparagraphsubdivision, “contractor-retailer” means a business that makes frequent retail sales to thepublic or to other contractors and that also engages in the performance of constructioncontracts.(iii) A finance or investment company.(iv) A retailer.(v) A wholesaler.(vi) A transportation company.(vii) A publisher.(viii) An agricultural cooperative association as defined in section 502.102.(ix) A real estate company.(x) A collection agency.(xi) An accountant.(xii) An architect.(2) The business claims and is allowed a research credit for such qualified research

expenses under section 41 of the Internal Revenue Code for the same taxable year as it isclaiming the credit provided in this section.b. (1) For individuals, the credit equals the sum of the following:(a) Six and one-half percent of the excess of qualified research expenses during the tax

year over the base amount for the tax year based upon the state’s apportioned share of thequalifying expenditures for increasing research activities.(b) Six and one-half percent of the basic research payments determined under section

41(e)(1)(A) of the Internal Revenue Code during the tax year based upon the state’sapportioned share of the qualifying expenditures for increasing research activities.(2) The state’s apportioned share of the qualifying expenditures for increasing research

activities is a percent equal to the ratio of qualified research expenditures in this state to totalqualified research expenditures.c. In lieu of the credit amount computed in paragraph “b”, subparagraph (1),

subparagraph division (a), a taxpayer may elect to compute the credit amount for qualifiedresearch expenses incurred in this state in a manner consistent with the alternative simplifiedcredit described in section 41(c)(5) of the Internal Revenue Code. The taxpayer may makethis election regardless of the method used for the taxpayer’s federal income tax. Theelection made under this paragraph is for the tax year and the taxpayer may use anotheror the same method for any subsequent year.d. For purposes of the alternate credit computation method in paragraph “c”, the credit

percentages applicable to qualified research expenses described in section 41(c)(5)(A)and clause (ii) of section 41(c)(5)(B) of the Internal Revenue Code are four and fifty-fivehundredths percent and one and ninety-five hundredths percent, respectively.2. For purposes of this section, an individual may claim a research credit incurred by









a partnership, S corporation, limited liability company, estate, or trust electing to have theincome taxed directly to the individual. The amount claimed by the individual shall be basedupon the pro rata share of the individual’s earnings of a partnership, S corporation, limitedliability company, estate, or trust.3. a. For purposes of this section, “base amount” means the product of the fixed-based

percentage times the average annual gross receipts of the taxpayer for the four taxable yearspreceding the taxable year for which the credit is being determined, but in no event shall thebase amount be less than fifty percent of the qualified research expenses for the credit year.b. For purposes of this section, “basic research payment” and “qualified research expense”

mean the same as defined for the federal credit for increasing research activities under section41 of the Internal Revenue Code, except that for the alternative simplified credit such amountsare for research conducted within this state.4. Any credit in excess of the tax liability imposed by section 422.5 less the amounts of

nonrefundable credits allowed under this division for the taxable year shall be refunded withinterest in accordance with section 421.60, subsection 2, paragraph “e”. In lieu of claiminga refund, a taxpayer may elect to have the overpayment shown on the taxpayer’s final,completed return credited to the tax liability for the following taxable year.5. An individual may claim an additional research activities credit authorized pursuant

to section 15.335 if the eligible business is a partnership, S corporation, limited liabilitycompany, or estate or trust which elects to have the income taxed directly to the individual.The amount of the credit shall be as provided in section 15.335.6. The department shall by February 15 of each year issue an annual report to the general

assembly containing the total amount of all claims made by employers under this sectionand the portion of the claims issued as refunds, for all claims processed during the previouscalendar year. The report shall contain the name of each claimant for whom a tax credit inexcess of five hundred thousand dollars was issued and the amount of the credit received.83 Acts, ch 179, §8, 25; 85 Acts, ch 230, §5; 86 Acts, ch 1007, §22; 87 Acts, 2nd Ex, ch 1, §10;

88 Acts, ch 1028, §21; 90 Acts, ch 1171, §3; 91 Acts, ch 159, §10; 91 Acts, ch 215, §2; 93 Acts, ch113, §2, 4; 94 Acts, ch 1166, §7, 11; 95 Acts, ch 152, §4, 7; 97 Acts, ch 23, §43; 97 Acts, ch 135,§6, 9; 98 Acts, ch 1078, §6, 10; 99 Acts, ch 95, §7, 12, 13; 2000 Acts, ch 1146, §4, 9, 11; 2000Acts, ch 1194, §9, 21; 2001 Acts, ch 127, §6, 9, 10; 2002 Acts, ch 1069, §7, 10, 14; 2003 Acts, ch139, §7, 11, 12; 2004 Acts, ch 1073, §17; 2005 Acts, ch 24, §6, 10, 11; 2006 Acts, ch 1140, §5,10, 11; 2006 Acts, ch 1158, §14, 15; 2007 Acts, ch 12, §4, 7, 8; 2008 Acts, ch 1011, §5, 9; 2009Acts, ch 179, §131, 153, 233; 2011 Acts, ch 41, §11, 12, 14, 16; 2012 Acts, ch 1007, §4, 7, 8; 2013Acts, ch 1, §4, 7, 8; 2014 Acts, ch 1076, §3, 6, 7; 2015 Acts, ch 1, §4, 7, 8; 2017 Acts, ch 157,§5, 12, 14; 2018 Acts, ch 1161, §4, 15, 16, 32 – 34, 43, 45, 85, 97, 98; 2019 Acts, ch 152, §57, 58Referred to in §2.48, 15.335, 422.5, 422.16Internal Revenue Code definition is updated regularly; for applicable definition in a prior tax year, refer to Iowa Acts and Code for that


2015, and for tax years beginning during the 2015 calendar year, see 2016 Acts, ch 1007, §1, 4, 52017 amendment to former subsection 3, paragraph b, changing a date reference to January 1, 2016, takes effect May 11, 2017, and

applies retroactively to January 1, 2016, for tax years beginning on or after that date; 2017 Acts, ch 157, §12, 14Subsection 1, paragraph a, applies retroactively to January 1, 2017, for tax years beginning on or after that date; 2018 Acts, ch 1161, §45Legislative intent regarding 2018 enactment of subsection 3, paragraph a, and amendment of subsection 3, paragraph b; 2018 Acts, ch

1161, §412018 strike of former subsection 3, paragraph b, is effective January 1, 2019, and applies to tax years beginning on or after that date;

2018 Acts, ch 1161, §97, 982018 amendment to subsection 4 applies retroactively to January 1, 2018, for tax years beginning, and for refunds issued, on or after

that date; 2018 Acts, ch 1161, §16Subsection 1, paragraph a, subparagraph (1), subparagraph division (a) amendedSubsection 1, paragraph a, subparagraph (1), subparagraph division (b), unnumbered paragraph 1 amended

422.10A Geothermal tax credit. Repealed by 2018 Acts, ch 1161, §42, 44, 46.



























































33 INDIVIDUAL INCOME, CORPORATE, AND FRANCHISE TAXES, §422.11A

422.10B Renewable chemical production tax credit.The taxes imposed under this division, less the credits allowed under section 422.12, shall

be reduced by a renewable chemical production tax credit allowed under section 15.319. Thissection is repealed January 1, 2033.2016 Acts, ch 1065, §12, 15, 16Referred to in §422.5, 422.16For restrictions on the issuance and claiming of renewable chemical production tax credits under §15.319, see 2016 Acts, ch 1065, §14Section takes effect April 6, 2016, and applies to renewable chemicals produced in the state from biomass feedstock on or after January

1, 2017; 2016 Acts, ch 1065, §15, 16

422.11 Franchise tax credit.The taxes imposed under this division, less the credits allowed under section 422.12,

shall be reduced by a franchise tax credit. A taxpayer who is a shareholder in a financialinstitution, as defined in section 581 of the Internal Revenue Code, which has in effect for thetax year an election under subchapter S of the Internal Revenue Code, or is a member of afinancial institution organized as a limited liability company under chapter 524 that is taxedas a partnership for federal income tax purposes, shall compute the amount of the tax creditby recomputing the amount of tax under this division by reducing the taxable income of thetaxpayer by the taxpayer’s pro rata share of the items of income and expense of the financialinstitution and subtracting the credits allowed under section 422.12. This recomputed taxshall be subtracted from the amount of tax computed under this division after the deductionfor credits allowed under section 422.12. The resulting amount, which shall not exceed thetaxpayer’s pro rata share of the franchise tax paid by the financial institution, is the amountof the franchise tax credit allowed.97 Acts, ch 154, §1, 3; 2004 Acts, ch 1141, §46; 2006 Acts, ch 1158, §16; 2007 Acts, ch 161,

§2, 22Referred to in §2.48, 422.5, 422.16

422.11A New jobs tax credit.The taxes imposed under this division, less the credits allowed under section 422.12, shall

be reduced by a new jobs tax credit. An industry which has entered into an agreement underchapter 260E andwhich has increased its base employment level by at least ten percent withinthe time set in the agreement or, in the case of an industry without a base employment level,adds new jobs within the time set in the agreement is entitled to this new jobs tax credit forthe tax year selected by the industry. In determining if the industry has increased its baseemployment level by ten percent or added new jobs, only those new jobs directly resultingfrom the project covered by the agreement and those directly related to those new jobs shall becounted. The amount of this credit is equal to the product of six percent of the taxable wagesupon which an employer is required to contribute to the state unemployment compensationfund, as defined in section 96.19, subsection 37, times the number of new jobs existing inthe tax year that directly result from the project covered by the agreement or new jobs thatdirectly result from those new jobs. The tax year chosen by the industry shall either begin orend during the period beginning with the date of the agreement and ending with the date bywhich the project is to be completed under the agreement. An individual may claim the newjobs tax credit allowed a partnership, subchapter S corporation, or estate or trust electing tohave the income taxed directly to the individual. The amount claimed by the individual shallbe based upon the pro rata share of the individual’s earnings of the partnership, subchapterS corporation, or estate or trust. Any credit in excess of the tax liability for the tax year maybe credited to the tax liability for the following ten tax years or until depleted, whichever isthe earlier. For purposes of this section, “agreement”, “industry”, “new job”, and “project”mean the same as defined in section 260E.2 and “base employment level”means the numberof full-time jobs an industry employs at the plant site which is covered by an agreement underchapter 260E on the date of that agreement.85 Acts, ch 32, §80; 89 Acts, ch 251, §14; 91 Acts, ch 159, §11; 2007 Acts, ch 161, §3, 22Referred to in §2.48, 422.5, 422.16




























https://www.legis.iowa.gov/docs/code//260E.pdf












§422.11B, INDIVIDUAL INCOME, CORPORATE, AND FRANCHISE TAXES 34

422.11B Minimum tax credit.1. a. There is allowed as a credit against the tax determined in section 422.5, subsection

1, for a tax year an amount equal to the minimum tax credit for that tax year.b. The minimum tax credit for a tax year is the excess, if any, of the net minimum tax

imposed for all prior tax years beginning on or after January 1, 1987, over the amountallowable as a credit under this section for those prior tax years.2. a. The allowable credit under subsection 1 for a tax year shall not exceed the excess, if

any, of the tax determined in section 422.5, subsection 1, over the state alternative minimumtax as determined in section 422.5, subsection 2.b. The net minimum tax for a tax year is the excess, if any, of the tax determined in section

422.5, subsection 2, for the tax year over the tax determined in section 422.5, subsection 1,for the tax year.89 Acts, ch 285, §4; 2006 Acts, ch 1158, §17, 18; 2009 Acts, ch 133, §243; 2018 Acts, ch 1161,

§86, 97, 98Referred to in §2.48, 422.5, 422.16For future amendment to this section, effective on or after January 1, 2023, contingent upon meeting certain net general fun revenue

criteria, see 2018 Acts, ch 1161, §121, 133, 1342018 amendment effective January 1, 2019, and applies to tax years beginning on or after that date; 2018 Acts, ch 1161, §97, 98

422.11C Workforce housing investment tax credit.The taxes imposed under this division, less the credits allowed under section 422.12, shall

be reduced by a workforce housing investment tax credit allowed under section 15.355,subsection 3.2014 Acts, ch 1130, §19, 24 – 26Referred to in §422.5, 422.16

422.11D Historic preservation tax credit.The taxes imposed under this division, less the credits allowed under section 422.12, shall

be reduced by a historic preservation tax credit allowed under chapter 404A.2000 Acts, ch 1194, §10; 2005 Acts, ch 179, §64; 2007 Acts, ch 161, §5, 22; 2007 Acts, ch 165,

§4, 9; 2012 Acts, ch 1138, §31; 2014 Acts, ch 1118, §8, 12; 2015 Acts, ch 30, §116; 2017 Acts,ch 29, §119Referred to in §422.5, 422.16

422.11E Beginning farmer tax credit program.The taxes imposed under this division, less the credits allowed under section 422.12, shall

be reduced by a beginning farmer tax credit as allowed under chapter 16, subchapter VIII,part 5, subpart B.2019 Acts, ch 161, §13, 18, 19Referred to in §16.82, 422.5, 422.16Section applies retroactively to January 1, 2019, for tax years beginning on or after that date; 2019 Acts, ch 161, §19NEW section

422.11F Investment tax credits.1. The taxes imposed under this division, less the credits allowed under section 422.12,

shall be reduced by an investment tax credit authorized pursuant to section 15E.43 for aninvestment in a qualifying business .2. The taxes imposed under this division, less the credits allowed under section 422.12,

shall be reduced by investment tax credits authorized pursuant to section 15.333 and section15E.193B, subsection 6, Code 2014.2002 Acts, ch 1006, §7, 13; 2006 Acts, ch 1158, §19; 2007 Acts, ch 161, §7, 22; 2014 Acts, ch

1130, §36; 2015 Acts, ch 138, §120, 126, 127Referred to in §422.5, 422.16

422.11G Venture capital fund investment tax credit. Repealed by 2010 Acts, ch 1138,§25, 26.























































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35 INDIVIDUAL INCOME, CORPORATE, AND FRANCHISE TAXES, §422.11L

422.11H Endow Iowa tax credit.The tax imposed under this division, less the credits allowed under section 422.12, shall be

reduced by an endow Iowa tax credit authorized pursuant to section 15E.305.2003 Acts, 1st Ex, ch 2, §84, 89; 2007 Acts, ch 161, §9, 22Referred to in §422.5, 422.16

422.11I Geothermal heat pump tax credit. Repealed by 2018 Acts, ch 1161, §42, 44, 46.See §422.12N.

422.11J Tax credits for wind energy production and renewable energy.The taxes imposed under this division, less the credits allowed under section 422.12, shall

be reduced by tax credits for wind energy production allowed under chapter 476B and forrenewable energy allowed under chapter 476C.2004 Acts, ch 1175, §404, 418; 2005 Acts, ch 160, §1, 14; 2007 Acts, ch 161, §11, 22Referred to in §422.5, 422.16

422.11K Economic development region revolving fund contribution taxcredit. Repealed by 2010 Acts, ch 1138, §15, 16.

422.11L Solar energy system tax credits.1. The taxes imposed under this division, less the credits allowed under section 422.12,

shall be reduced by a solar energy system tax credit equal to the sum of the following:a. Sixty percent of the federal residential energy efficient property credit related to solar

energy provided in section 25D(a)(1) and section 25D(a)(2) of the Internal Revenue Code,not to exceed five thousand dollars.b. Sixty percent of the federal energy credit related to solar energy systems provided in

section 48(a)(2)(A)(i)(II) and section 48(a)(2)(A)(i)(III) of the Internal Revenue Code, not toexceed twenty thousand dollars.c. Notwithstanding paragraphs “a” and “b” of this subsection, for installations occurring

on or after January 1, 2016, the applicable percentages of the federal residential energyefficiency property tax credit related to solar energy and the federal energy credit relatedto solar energy systems shall be fifty percent.2. Any credit in excess of the tax liability is not refundable but the excess for the tax year

may be credited to the tax liability for the following ten years or until depleted, whichever isearlier. The director of revenue shall adopt rules to implement this section.3. a. An individual may claim the tax credit allowed a partnership, limited liability

company, S corporation, estate, or trust electing to have the income taxed directly to theindividual. The amount claimed by the individual shall be based upon the pro rata share ofthe individual’s earnings of the partnership, limited liability company, S corporation, estate,or trust.b. A taxpayer who is eligible to claim a credit under this section shall not be eligible to

claim a renewable energy tax credit under chapter 476C.c. A taxpayer may claim more than one credit under this section, but may claim only one

credit per separate and distinct solar installation. The department shall establish criteria, byrule, for determining what constitutes a separate and distinct installation.d. (1) A taxpayer must submit an application to the department for each separate and

distinct solar installation. The application must be approved by the department in orderto claim the tax credit. The application must be filed by May 1 following the year of theinstallation of the solar energy system.(2) The department shall accept and approve applications on a first-come, first-served

basis until the maximum amount of tax credits that may be claimed pursuant to subsection4 is reached. If for a tax year the aggregate amount of tax credits applied for exceeds theamount specified in subsection 4, the department shall establish a wait list for tax credits.Valid applications filed by the taxpayer by May 1 following the year of the installation but notapproved by the department shall be placed on a wait list in the order the applications werereceived and those applicants shall be given priority for having their applications approved insucceeding years. Placement on a wait list pursuant to this subparagraph shall not constitute









https://www.legis.iowa.gov/docs/code/422.12N.pdf












https://www.legis.iowa.gov/docs/code/422.11L.pdf








§422.11L, INDIVIDUAL INCOME, CORPORATE, AND FRANCHISE TAXES 36

a promise binding the state. The availability of a tax credit and approval of a tax creditapplication pursuant to this section in a future year is contingent upon the availability of taxcredits in that particular year.4. a. The cumulative value of tax credits claimed annually by applicants pursuant to this

section shall not exceed five million dollars. Of this amount, at least one million dollars shallbe reserved for claims associated with or resulting from residential solar energy systeminstallations. In the event that the total amount of claims submitted for residential solarenergy system installations in a tax year is an amount less than one million dollars, theremaining unclaimed reserved amount shall be made available for claims associated with orresulting from nonresidential solar energy system installations received for the tax year.b. If an amount of tax credits available for a tax year pursuant to paragraph “a” goes

unclaimed, the amount of the unclaimed tax credits shall be made available for the followingtax year in addition to, and cumulated with, the amount available pursuant to paragraph “a”for the following tax year.5. On or before January 1, annually, the department shall submit a written report to the

governor and the general assembly regarding the number and value of tax credits claimedunder this section, and any other information the department may deem relevant andappropriate.6. For purposes of this section, “Internal Revenue Code”means the Internal Revenue Code

of 1954, prior to the date of its redesignation as the Internal Revenue Code of 1986 by the TaxReform Act of 1986, or means the Internal Revenue Code of 1986 as amended and in effecton January 1, 2016. This definition shall not be construed to include any amendment to theInternal Revenue Code enacted after the date specified in the preceding sentence, includingany amendment with retroactive applicability or effectiveness.2012 Acts, ch 1121, §7, 10, 11; 2014 Acts, ch 1121, §1 – 5; 2014 Acts, ch 1141, §77, 79, 80;

2015 Acts, ch 30, §117, 210; 2015 Acts, ch 124, §1, 2, 9, 10; 2016 Acts, ch 1128, §3, 4, 20; 2016Acts, ch 1138, §40, 41; 2017 Acts, ch 157, §6Referred to in §422.5, 422.16, 422.33, 422.60, 476C.2, 533.3292015 amendment to subsection 1, paragraph a, applies retroactively to January 1, 2014, for tax years beginning on or after that date;

2015 Acts, ch 30, §2102015 amendment to subsection 4, paragraph a, takes effect June 26, 2015, and applies retroactively to January 1, 2015, for tax years

beginning on or after that date; 2015 Acts, ch 124, §9, 10Subsection 6 applies retroactively to January 1, 2015, for tax years beginning on or after that date; 2016 Acts, ch 1128, §20; 2016 Acts,

ch 1138, §41For provisions relating to the eligibility of tax credit applications filed after the May 1 deadline for solar energy systems installed during

the 2014 and 2015 calendar years, see 2016 Acts, ch 1128, §14, 15

422.11M Agricultural assets transfer tax credit. Repealed by 2019 Acts, ch 161, §15, 18,19.2019 repeal applies retroactively to January 1, 2019, for tax years beginning on or after that date; for the continuing applicability of tax

credit to applications approved or submitted for approval before May 21, 2019, see 2019 Acts, ch 161, §16, 17, 19

422.11N Ethanol promotion tax credit.1. As used in this section, unless the context otherwise requires:a. “E-85 gasoline”, “ethanol”, “ethanol blended gasoline”, “gasoline”, “retail dealer”, and

“retail motor fuel site” mean the same as defined in section 214A.1.b. “Flexible fuel vehicle” means the same as defined in section 452A.2.c. “Motor fuel” means the same as defined in section 452A.2.d. “Motor fuel pump” means the same as defined in section 214.1.e. “Sell” means to sell on a retail basis.f. “Tax credit” means the ethanol promotion tax credit as provided in this section.2. The special terms provided in section 452A.31 shall also apply to this section.3. The taxes imposed under this division, less the credits allowed under section 422.12,

shall be reduced by an ethanol promotion tax credit for each tax year that the taxpayer iseligible to claim the tax credit under this section. In order to be eligible, all of the followingmust apply:a. The taxpayer is a retail dealer who sells and dispenses ethanol blended gasoline

through a motor fuel pump located at the retail dealer’s retail motor fuel site during the







































37 INDIVIDUAL INCOME, CORPORATE, AND FRANCHISE TAXES, §422.11N

determination period or parts of the determination periods for which the tax credit is claimedas provided in this section.b. The retail dealer complies with requirements of the department to administer this

section.4. a. When first claiming the tax credit, the retail dealer shall elect to compute and claim

the tax credit on a company-wide basis or site-by-site basis in the same manner as providedin section 452A.33.(1) In making a company-wide election, the retail dealer must compute and claim the tax

credit based on calculations as provided in this section for all retail motor fuel sites where theretail dealer sells and dispenses motor fuel on a retail basis. The retail dealer shall not claimthe tax credit based on a calculation which does not include all such retail motor fuel sites.A retail dealer shall use the company-wide election in order to calculate the retail dealer’sbiofuel threshold percentage as provided in subsection 5, paragraph “b”.(2) In making a site-by-site election, the retail dealer must compute and claim the tax

credit based on calculations as provided in this section for each retail motor fuel site wherethe retail dealer sells and dispenses motor fuel on a retail basis. The retail dealer shall notclaim the tax credit based on a calculation which includes two or more retail motor fuel sites.Nothing in this subparagraph requires the retail dealer to compute or claim a tax credit fora particular retail motor fuel site. The retail dealer shall not use the site-by-site election inorder to calculate the retail dealer’s biofuel threshold percentage as provided in subsection5, paragraph “b”.b. Once the retail dealer makes an election as provided in paragraph “a”, the retail dealer

shall not change the election without the written consent of the department.5. In order to receive the tax credit, the retail dealer must calculate all of the following:a. The retail dealer’s biofuel distribution percentage which is the sum of the retail

dealer’s total ethanol gallonage plus the retail dealer’s total biodiesel gallonage expressedas a percentage of the retail dealer’s total gasoline gallonage, in the retail dealer’s applicabledetermination period.b. The retail dealer’s biofuel threshold percentage is as follows:(1) For a retail dealer who sells and dispenses more than two hundred thousand gallons

of motor fuel in an applicable determination period, the retail dealer’s biofuel thresholdpercentage is as follows:(a) Ten percent for the determination period beginning on January 1, 2009, and ending

December 31, 2009.(b) Eleven percent for the determination period beginning on January 1, 2010, and ending

December 31, 2010.(c) Twelve percent for the determination period beginning on January 1, 2011, and ending

December 31, 2011.(d) Thirteen percent for the determination period beginning on January 1, 2012, and

ending December 31, 2012.(e) Fourteen percent for the determination period beginning on January 1, 2013, and

ending December 31, 2013.(f) Fifteen percent for the determination period beginning on January 1, 2014, and ending

December 31, 2014.(g) Seventeen percent for the determination period beginning on January 1, 2015, and

ending December 31, 2015.(h) Nineteen percent for the determination period beginning on January 1, 2016, and

ending December 31, 2016.(i) Twenty-one percent for the determination period beginning on January 1, 2017, and

ending December 31, 2017.(j) Twenty-three percent for the determination period beginning on January 1, 2018, and

ending December 31, 2018.(k) Twenty-five percent for each determination period in the period beginning on January

1, 2019, and ending on December 31, 2020.(2) For a retail dealer who sells and dispenses two hundred thousand gallons of motor

fuel or less in an applicable determination period, the biofuel threshold percentages shall be:











§422.11N, INDIVIDUAL INCOME, CORPORATE, AND FRANCHISE TAXES 38

(a) Six percent for the determination period beginning on January 1, 2009, and endingDecember 31, 2009.(b) Six percent for the determination period beginning on January 1, 2010, and ending

December 31, 2010.(c) Ten percent for the determination period beginning on January 1, 2011, and ending

December 31, 2011.(d) Eleven percent for the determination period beginning on January 1, 2012, and ending

December 31, 2012.(e) Twelve percent for the determination period beginning on January 1, 2013, and ending

December 31, 2013.(f) Thirteen percent for the determination period beginning on January 1, 2014, and

ending December 31, 2014.(g) Fourteen percent for the determination period beginning on January 1, 2015, and

ending December 31, 2015.(h) Fifteen percent for the determination period beginning on January 1, 2016, and ending

December 31, 2016.(i) Seventeen percent for the determination period beginning on January 1, 2017, and

ending December 31, 2017.(j) Nineteen percent for the determination period beginning on January 1, 2018, and

ending December 31, 2018.(k) Twenty-one percent for the determination period beginning on January 1, 2019, and

ending December 31, 2019.(l) Twenty-five percent for the determination period beginning on January 1, 2020, and

ending December 31, 2020.(3) (a) Notwithstanding paragraph “a”, the governor may adjust a biofuel threshold

percentage for a determination period if the governor finds that exigent circumstancesexist. Exigent circumstances exist due to potential substantial economic injury to the state’seconomy. Exigent circumstances also exist if it is probable that a substantial number ofretail dealers cannot comply with a biofuel threshold percentage during a determinationperiod due to any of the following:(i) Less than the target number of flexible fuel vehicles are registered under chapter 321.

The target numbers of flexible fuel vehicles are as follows:(A) On January 1, 2011, two hundred fifty thousand.(B) On January 1, 2014, three hundred fifty thousand.(C) On January 1, 2017, four hundred fifty thousand.(D) On January 1, 2019, five hundred fifty thousand.(ii) A shortage in the biofuel feedstock resulting in a dramatic decrease in biofuel

inventories.(b) If the governor finds that exigent circumstances exist, the governor may reduce the

applicable biofuel threshold percentage by replacing it with an adjusted biofuel thresholdpercentage. The governor shall consult with the department of revenue and the office ofrenewable fuels and coproducts pursuant to section 159A.3. The governor shall make theadjustment by giving notice of intent to issue a proclamationwhich shall take effect not earlierthan thirty-five days after publication in the Iowa administrative bulletin of a notice to issuethe proclamation. The governor shall provide a period of notice and comment in the samemanner as provided in section 17A.4, subsection 1. The adjusted biofuel threshold percentageshall be effective for the following determination period.c. The retail dealer’s biofuel threshold percentage disparity which is a positive percentage

difference obtained by taking the minuend which is the retail dealer’s biofuel thresholdpercentage and subtracting from it the subtrahend which is the retail dealer’s biofueldistribution percentage, in the retail dealer’s applicable determination period.6. a. For a retail dealer whose tax year is the same as a determination period beginning

on January 1 and ending on December 31, the retail dealer’s tax credit is calculated bymultiplying the retail dealer’s total ethanol gallonage by a tax credit rate, which may beadjusted based on the retail dealer’s biofuel threshold percentage disparity. The tax creditrate is as follows:





39 INDIVIDUAL INCOME, CORPORATE, AND FRANCHISE TAXES, §422.11O

(1) For any tax year in which the retail dealer has attained a biofuel threshold percentagefor the determination period, the tax credit rate is eight cents.(2) For any tax year in which the retail dealer has not attained a biofuel threshold

percentage for the determination period, the tax credit rate shall be adjusted based on theretail dealer’s biofuel threshold percentage disparity. The amount of the adjusted tax creditrate is as follows:(a) If the retail dealer’s biofuel threshold percentage disparity equals two percent or less,

the tax credit rate is six cents.(b) If the retail dealer’s biofuel threshold percentage disparity equals more than two

percent but not more than four percent, the tax credit rate is as follows:(i) For calendar year 2011, two and one-half cents.(ii) For calendar year 2012 and for each subsequent calendar year, four cents.(c) A retail dealer is not eligible for a tax credit if the retail dealer’s biofuel threshold

percentage disparity equals more than four percent.b. For a retail dealer whose tax year is not the same as a determination period beginning

on January 1 and ending on December 31, the retail dealer shall calculate the tax credit asfollows:(1) If a retail dealer has not claimed a tax credit in the retail dealer’s previous tax year,

the retail dealer may claim the tax credit in the retail dealer’s current tax year for that periodbeginning on January 1 of the retail dealer’s previous tax year to the last day of the retaildealer’s previous tax year. For that period the retail dealer shall calculate the tax credit inthe same manner as a retail dealer who will calculate the tax credit on December 31 of thatcalendar year as provided in paragraph “a”.(2) (a) For the period beginning on the first day of the retail dealer’s tax year until

December 31, the retail dealer shall calculate the tax credit in the same manner as a retaildealer who calculates the tax credit on that same December 31 as provided in paragraph “a”.(b) For the period beginning on January 1 to the end of the retail dealer’s tax year, the

retail dealer shall calculate the tax credit in the same manner as a retail dealer who willcalculate the tax credit on the following December 31 as provided in paragraph “a”.7. a. A retail dealer is eligible to claim an ethanol promotion tax credit as provided in this

section even though the retail dealer claims one or all of the following related tax credits:(1) The E-85 gasoline promotion tax credit pursuant to section 422.11O.(2) The E-15 plus gasoline promotion tax credit pursuant to section 422.11Y.b. The retail dealer may claim the ethanol promotion tax credit and one or more of the

related tax credits as provided in paragraph “a” for the same tax year and for the same ethanolgallonage.8. Any credit in excess of the retail dealer’s tax liability shall be refunded. In lieu of

claiming a refund, the retail dealer may elect to have the overpayment shown on the retaildealer’s final, completed return credited to the tax liability for the following tax year.9. An individual may claim the tax credit allowed a partnership, limited liability company,

S corporation, estate, or trust electing to have the income taxed directly to the individual. Theamount claimed by the individual shall be based upon the pro rata share of the individual’searnings of a partnership, limited liability company, S corporation, estate, or trust.10. This section is repealed on January 1, 2021.2006 Acts, ch 1142, §39, 49; 2006 Acts, ch 1175, §10 – 14, 17, 23; 2007 Acts, ch 126, §66;

2007 Acts, ch 161, §15, 22; 2010 Acts, ch 1031, §248; 2011 Acts, ch 25, §143; 2011 Acts, ch113, §3 – 9, 13, 14Referred to in §2.48, 422.5, 422.11O, 422.11Y, 422.16, 422.33For provisions relating to requirements for claiming an ethanol promotion tax credit in calendar year 2020 for a retail dealer whose tax

year ends prior to December 31, 2020, see 2006 Acts, ch 1142, §49; 2006 Acts, ch 1175, §17; 2011 Acts, ch 113, §11, 13, 14

422.11O E-85 gasoline promotion tax credit.1. As used in this section, unless the context otherwise requires:a. “E-85 gasoline”, “ethanol”, “gasoline”, and “retail dealer” mean the same as defined in

section 214A.1.b. “Motor fuel pump” means the same as defined in section 214.1.c. “Sell” means to sell on a retail basis.




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§422.11O, INDIVIDUAL INCOME, CORPORATE, AND FRANCHISE TAXES 40

d. “Tax credit” means the E-85 gasoline promotion tax credit as provided in this section.2. The taxes imposed under this division, less the credits allowed under section 422.12,

shall be reduced by an E-85 gasoline promotion tax credit for each tax year that the taxpayeris eligible to claim the tax credit under this subsection.a. In order to be eligible, all of the following must apply:(1) The taxpayer is a retail dealer who sells and dispenses E-85 gasoline through a motor

fuel pump located at the retail dealer’s retail motor fuel site during the calendar year or partsof the calendar year for which the tax credit is claimed as provided in this section.(2) The retail dealer complies with requirements of the department to administer this

section.b. The tax credit shall apply to E-85 gasoline that meets the standards provided in section

214A.2.3. For a retail dealer whose tax year is on a calendar year basis, the retail dealer shall

calculate the amount of the tax credit by multiplying a designated rate of sixteen cents by theretail dealer’s total E-85 gasoline gallonage as provided in sections 452A.31 and 452A.32.4. For a retail dealer whose tax year is not on a calendar year basis, the retail dealer shall

calculate the tax credit as follows:a. If a retail dealer has not claimed a tax credit in the retail dealer’s previous tax year, the

retail dealer may claim the tax credit in the retail dealer’s current tax year for that periodbeginning on January 1 of the retail dealer’s previous tax year to the last day of the retaildealer’s previous tax year. For that period the retail dealer shall calculate the tax credit inthe same manner as a retail dealer who will calculate the tax credit on December 31 of thatcalendar year as provided in subsection 3.b. (1) For the period beginning on the first day of the retail dealer’s tax year until

December 31, the retail dealer shall calculate the tax credit in the same manner as a retaildealer who calculates the tax credit on that same December 31 as provided in subsection 3.(2) For the period beginning on January 1 to the end of the retail dealer’s tax year, the

retail dealer shall calculate the tax credit in the same manner as a retail dealer who willcalculate the tax credit on the following December 31 as provided in subsection 3.5. a. A retail dealer is eligible to claim an E-85 gasoline promotion tax credit as provided

in this section even though the retail dealer claims one or all of the following related taxcredits:(1) The ethanol promotion tax credit pursuant to section 422.11N.(2) The E-15 plus gasoline promotion tax credit pursuant to section 422.11Y.b. (1) The retail dealer may claim the E-85 gasoline promotion tax credit and one or more

of the related tax credits as provided in paragraph “a” for the same tax year.(2) The retail dealer may claim the ethanol promotion tax credit as provided in paragraph

“a” for the same ethanol gallonage used to calculate and claim the E-85 gasoline promotiontax credit.6. Any credit in excess of the retail dealer’s tax liability shall be refunded. In lieu of


S corporation, estate, or trust electing to have the income taxed directly to the individual. Theamount claimed by the individual shall be based upon the pro rata share of the individual’searnings of a partnership, limited liability company, S corporation, estate, or trust.8. This section is repealed on January 1, 2025.2006 Acts, ch 1142, §40, 48, 49; 2006 Acts, ch 1175, §15, 23; 2007 Acts, ch 126, §67; 2007

Acts, ch 161, §16, 22; 2011 Acts, ch 113, §15 – 18, 22, 23; 2011 Acts, ch 131, §62, 78, 79; 2016Acts, ch 1106, §4Referred to in §2.48, 422.5, 422.11N, 422.11Y, 422.16, 422.33For future amendment to subsection 5, effective January 1, 2021, see 2016 Acts, ch 1106, §12, 15For provisions relating to requirements for claiming an E-85 gasoline promotion tax credit in calendar year 2024 for a retail dealer whose

tax year ends prior to December 31, 2024, see 2006 Acts, ch 1142, §49; 2011 Acts, ch 113, §20, 22, 23; 2016 Acts, ch 1106, §6

422.11P Biodiesel blended fuel tax credit.1. As used in this section, unless the context otherwise requires:






































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41 INDIVIDUAL INCOME, CORPORATE, AND FRANCHISE TAXES, §422.11P

a. “Biodiesel blended fuel”, “diesel fuel”, and “retail dealer” mean the same as defined insection 214A.1.b. “Motor fuel pump” means the same as defined in section 214.1.c. “Sell” means to sell on a retail basis.d. “Tax credit” means a biodiesel blended fuel tax credit as provided in this section.2. For purposes of this section, biodiesel blended fuel is classified in the same manner as

provided in section 214A.2.3. The taxes imposed under this division, less the credits allowed under section 422.12,

shall be reduced by a biodiesel blended fuel tax credit for each tax year that the taxpayer iseligible to claim a tax credit under this subsection.a. In order to be eligible, all of the following must apply:(1) The taxpayer is a retail dealer who sells and dispenses qualifying biodiesel blended

fuel through a motor fuel pump located at the retail dealer’s retail motor fuel site during thecalendar year or parts of the calendar years for which the tax credit is claimed as providedin this section.(2) The retail dealer complies with requirements of the department established to

administer this section.b. The tax credit shall apply to biodiesel blended fuel classified as provided in this

section, if the classification meets the standards provided in section 214A.2. In ensuringthat biodiesel blended fuel meets the classification requirements of this section, thedepartment shall take into account reasonable variances due to testing and other limitations.The department shall adopt rules to provide that where a blending error occurs and aninsufficient amount of biodiesel has inadvertently been blended with petroleum-based dieselfuel so that the mixture fails to qualify as B-11 or higher a one percent tolerance applieswhen classifying the biodiesel blended fuel.4. For a retail dealer whose tax year is on a calendar year basis, the retail dealer shall

calculate the amount of the tax credit by multiplying a designated rate by the retail dealer’stotal biodiesel blended fuel gallonage as provided in section 452A.31 which qualifies underthis subsection.a. In order to qualify for the tax credit, the biodiesel blended fuel must be classified as

B-5 or higher as provided in paragraph “b”.b. Beginning January 1, 2018, the designated rate is determined as follows:(1) For biodiesel blended fuel classified as B-5 or higher but not as high as B-11, the

designated rate is three and one-half cents.(2) For biodiesel blended fuel classified as B-11 or higher, the designated rate is five and

one-half cents.5. For a retail dealer whose tax year is not on a calendar year basis, the retail dealer shall




retail dealer shall calculate the tax credit in the same manner as a retail dealer who willcalculate the tax credit on the following December 31 as provided in subsection 4.6. Any credit in excess of the retail dealer’s tax liability shall be refunded. In lieu of


S corporation, estate, or trust electing to have the income taxed directly to the individual. The

















§422.11P, INDIVIDUAL INCOME, CORPORATE, AND FRANCHISE TAXES 42

amount claimed by the individual shall be based upon the pro rata share of the individual’searnings of the partnership, limited liability company, S corporation, estate, or trust.8. This section is repealed January 1, 2025.2006 Acts, ch 1142, §41, 48, 49; 2007 Acts, ch 161, §17, 22; 2008 Acts, ch 1169, §31, 32, 34,

35; 2008 Acts, ch 1191, §137; 2011 Acts, ch 113, §24 – 28, 33, 34; 2011 Acts, ch 131, §94, 104;2016 Acts, ch 1106, §7, 8Referred to in §2.48, 422.5, 422.16, 422.33For provisions relating to requirements for claiming a biodiesel blended fuel tax credit in calendar year 2024 for a retail dealer whose

tax year ends prior to December 31, 2024, see 2006 Acts, ch 1142, §49; 2011 Acts, ch 113, §31, 33, 34; 2016 Acts, ch 1106, §10

422.11Q Iowa fund of funds tax credit.The taxes imposed under this division, less the credits allowed under section 422.12, shall

be reduced by a tax credit authorized pursuant to section 15E.66, if redeemed, for investmentsin the Iowa fund of funds.2006 Acts, ch 1158, §20; 2007 Acts, ch 161, §18, 22Referred to in §422.5, 422.16

422.11R From farm to food donation tax credit.The taxes imposed under this division, less the credits allowed under section 422.12, shall

be reduced by a from farm to food donation tax credit as allowed under chapter 190B.2013 Acts, ch 140, §145, 147Referred to in §422.5, 422.16

422.11S School tuition organization tax credit.1. The taxes imposed under this division, less the credits allowed under section 422.12,

shall be reduced by a school tuition organization tax credit equal to sixty-five percent of theamount of the voluntary cash or noncash contributions made by the taxpayer during the taxyear to a school tuition organization, subject to the total dollar value of the organization’s taxcredit certificates as computed in subsection 8. The tax credit shall be claimed by use of atax credit certificate as provided in subsection 7.2. To be eligible for this credit, all of the following shall apply:a. A deduction pursuant to section 170 of the Internal Revenue Code for any amount of

the contribution is not taken for state tax purposes.b. The contribution does not designate that any part of the contribution be used for

the direct benefit of any dependent of the taxpayer or any other student designated by thetaxpayer.c. The value of a noncash contribution shall be appraised pursuant to rules of the director.3. Any credit in excess of the tax liability is not refundable but the excess for the tax year

may be credited to the tax liability for the following five tax years or until depleted, whicheveris the earlier.4. Married taxpayers who file separate returns or file separately on a combined return

formmust determine the tax credit under subsection 1 based upon their combined net incomeand allocate the total credit amount to each spouse in the proportion that each spouse’srespective net income bears to the total combined net income. Nonresidents or part-yearresidents of Iowa must determine their tax credit in the ratio of their Iowa source net incometo their all source net income. Nonresidents or part-year residents who are married and electto file separate returns or to file separately on a combined return form must allocate thetax credit between the spouses in the ratio of each spouse’s Iowa source net income to thecombined Iowa source net income of the taxpayers.5. An individual may claim the tax credit allowed a partnership, limited liability company,

S corporation, estate, or trust electing to have the income taxed directly to the individual. Theamount claimed by the individual shall be based upon the pro rata share of the individual’searnings of the partnership, limited liability company, S corporation, estate, or trust.6. For purposes of this section:a. “Eligible student”means a student who is a member of a household whose total annual

income during the calendar year before the student receives a tuition grant for purposesof this section does not exceed an amount equal to four times the most recently published

































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43 INDIVIDUAL INCOME, CORPORATE, AND FRANCHISE TAXES, §422.11S

federal poverty guidelines in the federal register by the United States department of healthand human services.b. “Qualified school” means a nonpublic elementary or secondary school in this state

which is accredited under section 256.11 and adheres to the provisions of the federal CivilRights Act of 1964 and chapter 216.c. “School tuition organization” means a charitable organization in this state that is

exempt from federal taxation under section 501(c)(3) of the Internal Revenue Code and thatdoes all of the following:(1) Allocates at least ninety percent of its annual revenue in tuition grants for children to

allow them to attend a qualified school of their parents’ choice.(2) Only awards tuition grants to children who reside in Iowa.(3) Provides tuition grants to students without limiting availability to only students of one

school.(4) Only provides tuition grants to eligible students.(5) Prepares an annual reviewed financial statement certified by a public accounting firm.7. a. In order for the taxpayer to claim the school tuition organization tax credit under

subsection 1, a tax credit certificate issued by the school tuition organization to whichthe contribution was made shall be included with the person’s tax return. The tax creditcertificate shall contain the taxpayer’s name, address, tax identification number, theamount of the contribution, the amount of the credit, and other information required by thedepartment.b. The department shall authorize a school tuition organization to issue tax credit

certificates for contributions made to the school tuition organization. The aggregate amountof tax credit certificates that the department shall authorize for a school tuition organizationfor a calendar year shall be determined for that organization pursuant to subsection 8.However, a school tuition organization shall not be authorized to issue tax credit certificatesunless the organization is controlled by a board of directors consisting of at least sevenmembers. The names and addresses of the members shall be provided to the departmentand shall be made available by the department to the public, notwithstanding any stateconfidentiality restrictions.c. Pursuant to rules of the department, a school tuition organization shall initially register

with the department. The organization’s registration shall include proof of section 501(c)(3)status and provide a list of the schools the school tuition organization serves. Once theschool tuition organization has registered, it is not required to subsequently register unlessthe schools it serves changes.d. Each school that is served by a school tuition organization shall submit a participation

form annually to the department by November 1 providing the following information:(1) Certified enrollment as of October 1, or the first Monday in October if October 1 falls

on a Saturday or Sunday.(2) The school tuition organization that represents the school. A school shall only be

represented by one school tuition organization.8. a. For purposes of this subsection:(1) “Certified enrollment” means the enrollment at schools served by school tuition

organizations as indicated by participation forms provided to the department each October.(2) “Total approved tax credits”means for the 2006 calendar year, twomillion five hundred

thousand dollars, for the 2007 calendar year, fivemillion dollars, for calendar years beginningon or after January 1, 2008, but before January 1, 2012, seven million five hundred thousanddollars, for calendar years beginning on or after January 1, 2012, but before January 1, 2014,eight million seven hundred fifty thousand dollars, for calendar years beginning on or afterJanuary 1, 2014, but before January 1, 2019, twelve million dollars, and for calendar yearsbeginning on or after January 1, 2019, but before January 1, 2020, thirteen million dollars,and for calendar years beginning on or after January 1, 2020, fifteen million dollars.(3) “Tuition grant”means grants to students to cover all or part of the tuition at a qualified

school.b. Each year by December 1, the department shall authorize school tuition organizations

to issue tax credit certificates for the following calendar year. However, for the 2006 calendar







§422.11S, INDIVIDUAL INCOME, CORPORATE, AND FRANCHISE TAXES 44

year only, the department, by September 1, 2006, shall authorize school tuition organizationsto issue tax credit certificates for the 2006 calendar year. For the 2006 calendar year only,each school served by a school tuition organization shall submit a participation form to thedepartment by August 1, 2006, providing the certified enrollment as of the third Friday ofSeptember 2005, along with the school tuition organization that represents the school. Taxcredit certificates available for issue by each school tuition organization shall be determinedin the following manner:(1) Total the certified enrollment of each participating qualified school to arrive at the

total participating certified enrollment.(2) Determine the per student tax credit available by dividing the total approved tax

credits by the total participating certified enrollment.(3) Multiply the per student tax credit by the total participating certified enrollment of

each school tuition organization.9. A school tuition organization that receives a voluntary cash or noncash contribution

pursuant to this section shall report to the department, on a form prescribed by thedepartment, by January 12 of each calendar year all of the following information:a. The name and address of the members and the chairperson of the governing board of

the school tuition organization.b. The total number and dollar value of contributions received and the total number and

dollar value of the tax credits approved during the previous calendar year.c. A list of the individual donors for the previous calendar year that includes the dollar

value of each donation and the dollar value of each approved tax credit.d. The total number of children utilizing tuition grants for the school year in progress and

the total dollar value of the grants.e. The name and address of each represented school at which tuition grants are currently

being utilized, detailing the number of tuition grant students and the total dollar value ofgrants being utilized at each school served by the school tuition organization.2006 Acts, ch 1163, §1, 2; 2007 Acts, ch 161, §20, 22; 2007 Acts, ch 186, §9 – 13, 31; 2007

Acts, ch 215, §111; 2011 Acts, ch 131, §95, 158; 2012 Acts, ch 1021, §74; 2013 Acts, ch 122,§4 – 7; 2014 Acts, ch 1026, §85; 2014 Acts, ch 1093, §14; 2018 Acts, ch 1161, §35, 36, 44; 2019Acts, ch 152, §4 – 8, 46, 47Referred to in §2.48, 422.5, 422.16, 422.33For future amendment to subsection 4, effective on or after January 1, 2023, contingent upon meeting certain net general fund revenue

criteria, see 2018 Acts, ch 1161, §122, 133, 134For the legislative intent of 2019 amendments by 2019 Acts, ch 152, §4 – 8, see 2019 Acts, ch 152, §13See Code editor’s note on simple harmonization at the end of Vol VICode editor directive appliedSubsection 7, paragraph b amendedSubsection 8, paragraph a, subparagraph (2) amendedSubsection 8, paragraph b, unnumbered paragraph 1 amendedSubsection 9, unnumbered paragraph 1 amendedSubsection 9, paragraphs b and c amended

422.11T Film qualified expenditure tax credit. Repealed by 2012 Acts, ch 1136, §38 – 41.

422.11U Film investment tax credit. Repealed by 2012 Acts, ch 1136, §38 – 41.

422.11V Redevelopment tax credit.The taxes imposed under this division, less the credits allowed under section 422.12, shall

be reduced by a redevelopment tax credit allowed under chapter 15, subchapter II, part 9.2008 Acts, ch 1173, §8; 2009 Acts, ch 41, §124Referred to in §422.5, 422.16

422.11W Charitable conservation contribution tax credit.1. The taxes imposed under this division, less the credits allowed under section 422.12,

shall be reduced by a charitable conservation contribution tax credit equal to fifty percentof the fair market value of a qualified real property interest located in the state that isconveyed as an unconditional charitable donation in perpetuity by the taxpayer to a qualifiedorganization exclusively for conservation purposes. The maximum amount of tax credit is































45 INDIVIDUAL INCOME, CORPORATE, AND FRANCHISE TAXES, §422.11Y

one hundred thousand dollars. The amount of the contribution for which the tax credit isclaimed shall not be deductible in determining taxable income for state tax purposes.2. For purposes of this section, “conservation purpose”, “qualified organization”, and

“qualified real property interest” mean the same as defined for the qualified conservationcontribution under section 170(h) of the Internal Revenue Code, except that a conveyance ofland for open space for the purpose of fulfilling density requirements to obtain subdivisionor building permits shall not be considered a conveyance for a conservation purpose.3. Any credit in excess of the tax liability is not refundable but the excess for the tax

year may be credited to the tax liability for the following twenty tax years or until depleted,whichever is the earlier.4. An individual may claim the tax credit allowed a partnership, limited liability company,

S corporation, estate, or trust electing to have the income taxed directly to the individual. Theamount claimed by the individual shall be based upon the pro rata share of the individual’searnings of the partnership, limited liability company, S corporation, estate, or trust.2008 Acts, ch 1191, §62, 107Referred to in §2.48, 422.5, 422.16

422.11X Disaster recovery housing project tax credit. Repealed by 2014 Acts, ch 1080,§111, 114.

422.11Y E-15 plus gasoline promotion tax credit.1. As used in this section, unless the context otherwise requires:a. “E-85 gasoline”, “ethanol”, “gasoline”, “retail dealer”, and “retail motor fuel site” mean

the same as defined in section 214A.1.b. “Motor fuel pump” means the same as defined in section 214.1.c. “Sell” means to sell on a retail basis.d. “Tax credit” means the E-15 plus gasoline promotion tax credit as provided in this

section.2. For purposes of this section, ethanol blended gasoline is classified in the same manner

as provided in section 214A.2.3. The taxes imposed under this division, less the credits allowed under section 422.12,

shall be reduced by the amount of the E-15 plus gasoline promotion tax credit for each taxyear that the taxpayer is eligible to claim a tax credit under this subsection.a. In order to be eligible, all of the following must apply:(1) The taxpayer is a retail dealer who sells and dispenses qualifying ethanol blended

gasoline through a motor fuel pump located at the retail dealer’s retail motor fuel site duringthe calendar year or parts of the calendar years for which the tax credit is claimed as providedin this section.(2) The retail dealer complies with requirements of the department established to

administer this section.b. The tax credit shall apply to ethanol blended gasoline classified as provided in this

section, if the classification meets the standards provided in section 214A.2.4. For a retail dealer whose tax year is on a calendar year basis, the retail dealer shall

calculate the amount of the tax credit by multiplying a designated rate by the retail dealer’stotal ethanol blended gasoline gallonage as provided in section 452A.31 which qualifies underthis subsection.a. In order to qualify for the tax credit, the ethanol blended gasoline must be classified as

E-15 or higher but not classified as E-85.b. The designated rate of the tax credit for the following three periods within each

calendar year is as follows:(1) For the first period beginning January 1 and ending May 31, three cents.(2) For the second period beginning June 1 and ending September 15, ten cents.(3) For the third period beginning September 16 and ending December 31, three cents.5. For a retail dealer whose tax year is not on a calendar year basis, the retail dealer shall



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§422.11Y, INDIVIDUAL INCOME, CORPORATE, AND FRANCHISE TAXES 46



retail dealer shall calculate the tax credit in the same manner as a retail dealer who willcalculate the tax credit on the following December 31 as provided in subsection 4.6. a. A retail dealer is eligible to claim an E-15 plus gasoline promotion tax credit as

provided in this section even though the retail dealer claims one or all of the following relatedtax credits:(1) The ethanol promotion tax credit pursuant to section 422.11N.(2) The E-85 gasoline promotion tax credit pursuant to section 422.11O.b. (1) The retail dealer may claim the E-15 plus gasoline promotion tax credit and one or

more of the related tax credits as provided in paragraph “a” for the same tax year.(2) The retail dealer may claim the ethanol promotion tax credit as provided in paragraph

“a” for the same ethanol gallonage used to calculate and claim the E-15 plus gasolinepromotion tax credit.7. Any credit in excess of the retail dealer’s tax liability shall be refunded. In lieu of


S corporation, estate, or trust electing to have the income taxed directly to the individual. Theamount claimed by the individual shall be based upon the pro rata share of the individual’searnings of a partnership, limited liability company, S corporation, estate, or trust.9. This section is repealed on January 1, 2025.2011 Acts, ch 113, §35, 39, 40; 2011 Acts, ch 131, §63 – 65, 79, 158; 2014 Acts, ch 1104, §15

– 17; 2016 Acts, ch 1106, §1Referred to in §422.5, 422.11N, 422.11O, 422.16, 422.33For future amendment to subsection 6, effective January 1, 2021, see 2016 Acts, ch 1106, §13, 15For provisions relating to requirements for claiming an E-15 plus gasoline promotion tax credit in calendar year 2024 for a retail dealer

whose tax year ends prior to December 31, 2024, see 2011 Acts, ch 113, §37, 39, 40; 2016 Acts, ch 1106, §3

422.11Z Innovation fund investment tax credits.The taxes imposed under this division, less the credits allowed under section 422.12, shall

be reduced by an innovation fund investment tax credit allowed under section 15E.52.2011 Acts, ch 130, §41, 47, 71Referred to in §422.5, 422.16

422.12 Deductions from computed tax.1. As used in this section:a. “Dependent” has the same meaning as provided by the Internal Revenue Code.b. “Emergency medical services personnel member” means an emergency medical care

provider, as defined in section 147A.1, who is certified as a first responder pursuant to chapter147A.c. “Reserve peace officer”means a reserve peace officer as defined in section 80D.1A who

has met the minimum training standards established by the Iowa law enforcement academypursuant to chapter 80D.d. “Textbooks” means books and other instructional materials and equipment used in

elementary and secondary schools in teaching only those subjects legally and commonlytaught in public elementary and secondary schools in this state and does not includeinstructional books and materials used in the teaching of religious tenets, doctrines, orworship, the purpose of which is to inculcate those tenets, doctrines, or worship. “Textbooks”includes books or materials used for extracurricular activities including sporting events,






























https://www.legis.iowa.gov/docs/code/80D.1A.pdf



musical or dramatic events, speech activities, driver’s education, or programs of a similarnature.e. “Tuition” means any charges for the expenses of personnel, buildings, equipment, and

materials other than textbooks, and other expenses of elementary or secondary schools whichrelate to the teaching only of those subjects legally and commonly taught in public elementaryand secondary schools in this state and which do not relate to the teaching of religious tenets,doctrines, or worship, the purpose of which is to inculcate those tenets, doctrines, or worship.“Tuition” includes those expenses which relate to extracurricular activities including sportingevents, musical or dramatic events, speech activities, driver’s education, or programs of asimilar nature.f. “Volunteer fire fighter” means an individual that meets both of the following

requirements:(1) The individual is an active member of an organized volunteer fire department in

this state or is performing services as a volunteer fire fighter for a municipality, township,or benefited fire district at the request of the chief or other person in command of the firedepartment of the municipality, township, or benefited fire district, or of any other officerof the municipality, township, or benefited fire district having authority to demand suchservice. A person performing such services shall not be classified as a casual employee.(2) The individual has met the minimum training standards established by the fire service

training bureau pursuant to chapter 100B.2. There shall be deducted from but not to exceed the tax, after the same shall have been

computed as provided in this division, the following:a. A personal exemption credit in the following amounts:(1) For an estate or trust, a single individual, or a married person filing a separate return,

forty dollars.(2) For a head of household, or a husband and wife filing a joint return, eighty dollars.(3) For each dependent, an additional forty dollars.(4) For a single individual, husband, wife, or head of household, an additional exemption

of twenty dollars for each of said individuals who has attained the age of sixty-five yearsbefore the close of the tax year or on the first day following the end of the tax year.(5) For a single individual, husband, wife, or head of household, an additional exemption

of twenty dollars for each of said individuals who is blind at the close of the tax year. For thepurposes of this subparagraph, an individual is blind only if the individual’s central visualacuity does not exceed twenty-two hundredths in the better eye with correcting lenses, or ifthe individual’s visual acuity is greater than twenty-two hundredths but is accompanied by alimitation in the fields of vision such that the widest diameter of the visual field subtends anangle no greater than twenty degrees.b. A tuition credit equal to twenty-five percent of the first one thousand dollars which

the taxpayer has paid to others for each dependent in grades kindergarten through twelve,for tuition and textbooks of each dependent in attending an elementary or secondary schoolsituated in Iowa, which school is accredited or approved under section 256.11, which is notoperated for profit, and which adheres to the provisions of the federal Civil Rights Act of 1964and chapter 216. Notwithstanding any other provision, all other credits allowed under thissubsection shall be deducted before the tuition credit under this paragraph. The department,when conducting an audit of a taxpayer’s return, shall also audit the tuition tax credit portionof the tax return.c. (1) A volunteer fire fighter and volunteer emergency medical services personnel

member credit equal to one hundred dollars to compensate the taxpayer for the voluntaryservices if the volunteer served for the entire tax year. A taxpayer who is a paid employeeof an emergency medical services program or a fire department and who is also a volunteeremergency medical services personnel member or volunteer fire fighter in a city, county,or area governed by an agreement pursuant to chapter 28E where the emergency medicalservices program or fire department performs services, shall qualify for the credit providedunder this paragraph “c”.(2) If the taxpayer is not a volunteer fire fighter or volunteer emergency medical services

personnel member for the entire tax year, the maximum amount of the credit shall be










prorated and the amount of credit for the taxpayer shall equal the maximum amount ofcredit for the tax year, divided by twelve, multiplied by the number of months in the taxyear the taxpayer was a volunteer. The credit shall be rounded to the nearest dollar. Ifthe taxpayer is a volunteer during any part of a month, the taxpayer shall be considered avolunteer for the entire month. If the taxpayer is a volunteer fire fighter and a volunteeremergency medical services personnel member during the same month, a credit may beclaimed for only one volunteer position for that month.(3) The taxpayer is required to have a written statement from the fire chief or other

appropriate supervisor verifying that the taxpayer was a volunteer fire fighter or volunteeremergency medical services personnel member for the months for which the credit underthis paragraph “c” is claimed.d. (1) A reserve peace officer credit equal to one hundred dollars to compensate the

taxpayer for services as a reserve peace officer if the reserve peace officer served for theentire tax year.(2) If the taxpayer is not a reserve peace officer for the entire tax year, the maximum

amount of the credit shall be prorated and the amount of credit for the taxpayer shall equalthemaximum amount of credit for the tax year, divided by twelve, multiplied by the number ofmonths in the tax year the taxpayer was a reserve peace officer. The credit shall be rounded tothe nearest dollar. If the taxpayer is a reserve peace officer any part of a month, the taxpayershall be considered a reserve peace officer for the entire month.(3) If the taxpayer is a reserve peace officer during the same month as the taxpayer is a

volunteer fire fighter or volunteer emergency medical services personnel member, as definedin this section, a credit may be claimed for only one position for that month under eitherparagraph “c” or this paragraph “d”.(4) The taxpayer is required to have a written statement from the chief of police, sheriff,

commissioner of public safety, or other appropriate supervisor verifying that the taxpayerwas a reserve peace officer for the months for which the credit under this paragraph “d” isclaimed.3. For the purpose of this section, the determination of whether an individual is married

shall be made in accordance with section 7703 of the Internal Revenue Code.[C35, §6943-f12; C39, §6943.044; C46, 50, 54, 58, 62, 66, 71, 73, 75, 77, 79, 81, §422.12]83 Acts, ch 179, §9, 10, 22; 84 Acts, ch 1305, §32; 86 Acts, ch 1236, §6, 7; 86 Acts, ch 1241,

§15; 87 Acts, ch 233, §494; 88 Acts, ch 1028, §22, 23; 89 Acts, ch 296, §42; 90 Acts, ch 1248,§9; 91 Acts, ch 159, §13; 95 Acts, ch 206, §2, 4; 96 Acts, ch 1168, §2, 3; 98 Acts, ch 1177, §7 –10; 2006 Acts, ch 1158, §21; 2007 Acts, ch 161, §21, 22; 2009 Acts, ch 133, §140; 2012 Acts, ch1103, §1 – 4; 2014 Acts, ch 1103, §1 – 5; 2015 Acts, ch 29, §50 – 52Referred to in §2.48, 96.3, 216B.3, 422.5, 422.10B, 422.11, 422.11A, 422.11C, 422.11D, 422.11E, 422.11F, 422.11H, 422.11J, 422.11L,

422.11N, 422.11O, 422.11P, 422.11Q, 422.11R, 422.11S, 422.11V, 422.11W, 422.11Y, 422.11Z, 422.12A, 422.12B, 422.12N, 422.16

422.12A Adoption tax credit.1. For purposes of this section, unless the context otherwise requires:a. “Adoption” means the permanent placement in this state of a child by the department

of human services, by an adoption service provider as defined in section 600A.2, or by anagency that meets the provisions of the interstate compact in section 232.158.b. “Child” means an individual who is under the age of eighteen years.c. “Qualified adoption expenses” means unreimbursed expenses paid or incurred in

connection with the adoption of a child, including medical and hospital expenses of thebiological mother which are incident to the child’s birth, welfare agency fees, legal fees, andall other fees and costs which relate to the adoption of a child. “Qualified adoption expenses”does not include expenses paid or incurred in violation of state or federal law.2. The taxes imposed under this division, less the credits allowed under section 422.12,

shall be reduced by an adoption tax credit equal to the amount of qualified adoption expensespaid or incurred by the taxpayer in connection with the adoption of a child by the taxpayer,not to exceed five thousand dollars per adoption.3. Any credit in excess of the tax liability is refundable. In lieu of claiming a refund, the

































https://www.legis.iowa.gov/docs/code/422.11C.pdf

https://www.legis.iowa.gov/docs/code/422.11D.pdf


https://www.legis.iowa.gov/docs/code/422.11F.pdf

https://www.legis.iowa.gov/docs/code/422.11H.pdf

https://www.legis.iowa.gov/docs/code/422.11J.pdf





https://www.legis.iowa.gov/docs/code/422.11Q.pdf

https://www.legis.iowa.gov/docs/code/422.11R.pdf


https://www.legis.iowa.gov/docs/code/422.11V.pdf

https://www.legis.iowa.gov/docs/code/422.11W.pdf


https://www.legis.iowa.gov/docs/code/422.11Z.pdf










49 INDIVIDUAL INCOME, CORPORATE, AND FRANCHISE TAXES, §422.12C

taxpayer may elect to have the overpayment shown on the taxpayer’s final, completed returncredited to the tax liability for the following tax year.4. The credit under this section with respect to any qualified adoption expense shall be

allowed during a tax year as follows:a. For any qualified adoption expense paid or incurred prior to or during the tax year in

which the adoption becomes final, the tax year in which the adoption becomes final.b. For any qualified adoption expense paid or incurred after the tax year in which the

adoption becomes final, the tax year in which an adoption expense is paid or incurred.5. The department of revenue and the department of human services shall each adopt

rules to jointly administer this section.2014 Acts, ch 1113, §1, 3; 2016 Acts, ch 1128, §5, 17, 26; 2017 Acts, ch 113, §2; 2019 Acts,

ch 152, §61 – 63Referred to in §422.9, 422.162016 amendment to subsection 2 takes effect January 1, 2017, and applies to tax years beginning on or after that date; 2016 Acts, ch

1128, §17, 262019 amendments to section apply retroactively to January 1, 2019, for tax years beginning on or after that date; 2019 Acts, ch 152, §63Subsection 2 amendedNEW subsection 4 and former subsection 4 renumbered as 5

422.12B Earned income tax credit.1. a. The taxes imposed under this division less the credits allowed under section 422.12

shall be reduced by an earned income credit equal to the following percentage of the federalearned income credit provided in section 32 of the Internal Revenue Code:(1) For the tax year beginning in the 2013 calendar year, fourteen percent.(2) For tax years beginning on or after January 1, 2014, fifteen percent.b. Any credit in excess of the tax liability is refundable.2. Married taxpayers electing to file separate returns or filing separately on a combined

return may avail themselves of the earned income credit by allocating the earned incomecredit to each spouse in the proportion that each spouse’s respective earned income bears tothe total combined earned income. Taxpayers affected by the allocation provisions of section422.8 shall be permitted a deduction for the credit only in the amount fairly and equitablyallocable to Iowa under rules prescribed by the director.89 Acts, ch 268, §6; 90 Acts, ch 1171, §4; 91 Acts, ch 159, §14; 91 Acts, ch 215, §3; 2000 Acts,

ch 1146, §5, 9, 11; 2007 Acts, ch 161, §1, 22; 2013 Acts, ch 123, §70, 71Referred to in §2.48, 422.16For future amendment to subsection 2, effective on or after January 1, 2023, contingent upon meeting certain net general fund revenue

criteria, see 2018 Acts, ch 1161, §123, 133, 134Meaning of "Internal Revenue Code" for tax years beginning during the 2018 calendar year; 2018 Acts, ch 1161, §62, 66

422.12C Child and dependent care or early childhood development tax credits.1. The taxes imposed under this division, less the amounts of nonrefundable credits

allowed under this division, shall be reduced by a child and dependent care credit equal tothe following percentages of the federal child and dependent care credit provided in section21 of the Internal Revenue Code, without regard to whether or not the federal credit waslimited by the taxpayer’s federal tax liability:a. For a taxpayer with net income of less than ten thousand dollars, seventy-five percent.b. For a taxpayer with net income of ten thousand dollars or more but less than twenty

thousand dollars, sixty-five percent.c. For a taxpayer with net income of twenty thousand dollars or more but less than

twenty-five thousand dollars, fifty-five percent.d. For a taxpayer with net income of twenty-five thousand dollars or more but less than

thirty-five thousand dollars, fifty percent.e. For a taxpayer with net income of thirty-five thousand dollars or more but less than

forty thousand dollars, forty percent.f. For a taxpayer with net income of forty thousand dollars or more but less than forty-five

thousand dollars, thirty percent.g. For a taxpayer with net income of forty-five thousand dollars or more, zero percent.2. a. The taxes imposed under this division, less the amounts of nonrefundable credits

allowed under this division, may be reduced by an early childhood development tax credit

































§422.12C, INDIVIDUAL INCOME, CORPORATE, AND FRANCHISE TAXES 50

equal to twenty-five percent of the first one thousand dollars which the taxpayer has paid toothers for each dependent, as defined in the Internal Revenue Code, ages three through fivefor early childhood development expenses. In determining the amount of early childhooddevelopment expenses for the tax year beginning in the 2006 calendar year only, suchexpenses paid during November and December of the previous tax year shall be consideredpaid in the tax year for which the tax credit is claimed. This credit is available to a taxpayerwhose net income is less than forty-five thousand dollars. If the early childhood developmenttax credit is claimed for a tax year, the taxpayer and the taxpayer’s spouse shall not claimthe child and dependent care credit under subsection 1.b. As used in this subsection:(1) “Early childhood development expenses”means services provided to the dependent by

a preschool, as defined in section 237A.1, materials, and other activities as follows:(a) Books that improve child development, including textbooks, music books, art books,

teacher’s editions, and reading books.(b) Instructional materials required to be used in a child development or educational

lesson activity, including but not limited to paper, notebooks, pencils, and art supplies.(c) Lesson plans and curricula.(d) Child development and educational activities outside the home, including drama, art,

music, andmuseum activities, and the entrance fees for such activities, but not including foodor lodging, membership fees, or other nonacademic expenses.(2) “Early childhood development expenses” does not include services, materials, or

activities for the teaching of religious tenets, doctrines, or worship, the purpose of which isto inculcate those tenets, doctrines, or worship.3. Any credit in excess of the tax liability shall be refunded. In lieu of claiming a refund, a

taxpayer may elect to have the overpayment shown on the taxpayer’s final, completed returncredited to the tax liability for the following taxable year.4. Married taxpayers who have filed joint federal returns electing to file separate returns

or to file separately on a combined return form must determine the child and dependent carecredit under subsection 1 or the early childhood development tax credit under subsection 2based upon their combined net income and allocate the total credit amount to each spousein the proportion that each spouse’s respective net income bears to the total combined netincome. Nonresidents or part-year residents of Iowa must determine their Iowa child anddependent care credit under subsection 1 or the early childhood development tax creditunder subsection 2 in the ratio of their Iowa source net income to their all source net income.Nonresidents or part-year residents who are married and elect to file separate returns or tofile separately on a combined return form must allocate the Iowa child and dependent carecredit under subsection 1 or the early childhood development tax credit under subsection 2between the spouses in the ratio of each spouse’s Iowa source net income to the combinedIowa source net income of the taxpayers.90 Acts, ch 1248, §10; 91 Acts, ch 159, §15; 93 Acts, ch 172, §44, 56; 97 Acts, ch 23, §44;

2005 Acts, ch 148, §23 – 27; 2006 Acts, ch 1158, §23 – 25, 69; 2014 Acts, ch 1026, §86; 2014Acts, ch 1120, §1 – 3; 2019 Acts, ch 152, §9, 14, 15Referred to in §2.48, 422.16For future amendment to subsection 4, effective on or after January 1, 2023, contingent upon meeting certain net general fund revenue

criteria, see 2018 Acts, ch 1161, §124, 133, 1342019 amendment to subsection 4 applies retroactively to January 1, 2019, for tax years beginning on or after that date; 2019 Acts, ch

152, §15For refunds of the early childhood development tax credit requested on or after May 16, 2019, see 2019 Acts, ch 152, §12, 14Subsection 4 amended

422.12D Income tax checkoff for the Iowa state fair foundation fund. Repealed by itsown terms; 2014 Acts, ch 1141, §59, 61, 62. See §422.12I.

422.12E Income tax return checkoffs limited — notification of repeal.1. There shall be allowed no more than four income tax return checkoffs on each income

tax return. For tax years beginning on or after January 1, 2017, when the same four incometax return checkoffs have been provided on the income tax return for two consecutive taxyears, the two checkoffs for which the least amount has been contributed, in the aggregate


























https://www.legis.iowa.gov/docs/code/422.12I.pdf

51 INDIVIDUAL INCOME, CORPORATE, AND FRANCHISE TAXES, §422.12H

for the first tax year and through March 15 after the end of the second tax year, are repealedon December 31 after the end of the second tax year and shall be removed from the returnform.2. If more checkoffs are enacted in the same session of the general assembly than there

is space for inclusion on the individual tax return form, the checkoffs with the earliest dateof enactment as determined pursuant to section 3.7 for which there is space for inclusion onthe return form shall be included on the return form, and all other checkoffs enacted duringthat session of the general assembly are repealed on December 31 of the year of enactment.If more checkoffs are enacted in the same session of the general assembly than there is spacefor inclusion on the individual income tax form and it is indeterminable which checkoffs havethe earliest date of enactment pursuant to section 3.7, the director shall determine whichcheckoffs shall be included on the return form, and all other checkoffs not included on thereturn form shall be repealed on December 31 of the year of enactment and shall not beincluded on the return form.3. a. By July 1 of the year in which two checkoffs are repealed pursuant to subsection

1, the department shall notify the Iowa Code editor which two checkoffs received the leastamount of contributions and are repealed.b. By September 1 of any applicable year, the department shall notify the Iowa Code editor

of any repeal pursuant to subsection 2.93 Acts, ch 144, §4, 6; 94 Acts, ch 1199, §3 – 6; 2004 Acts, ch 1175, §437, 439; 2007 Acts, ch

186, §14; 2016 Acts, ch 1138, §34, 35; 2017 Acts, ch 144, §6, 14; 2019 Acts, ch 152, §49Referred to in §422.12G, 422.12H, 422.12I, 422.12K, 422.16Joint checkoff for veterans trust fund and volunteer fire fighter preparedness fund; §422.12GCheckoff for fish and game protection fund; §422.12HCheckoff for Iowa state fair foundation; §422.12ICheckoff for child abuse prevention program fund; §422.12KFor checkoffs allowed for tax years beginning January 1, 2016, January 1, 2017, and January 1, 2018, see 2016 Acts, ch 1138, §33Section amended

422.12F Income tax checkoff for child abuse prevention program fund. Repealed by itsown terms; 2010 Acts, ch 1193, §159, 163.

422.12G Joint income tax checkoff for veterans trust fund and volunteer fire fighterpreparedness fund.1. A person who files an individual or a joint income tax return with the department of

revenue under section 422.13 may designate one dollar or more to be paid jointly to theveterans trust fund created in section 35A.13 and to the volunteer fire fighter preparednessfund created in section 100B.13. If the refund due on the return or the payment remitted withthe return is insufficient to pay the additional amount designated by the taxpayer, the amountdesignated shall be reduced to the remaining amount of refund or the remaining amountremitted with the return. The designation of a contribution under this section is irrevocable.2. The director of revenue shall draft the income tax form to allow the designation of

contributions to the veterans trust fund and to the volunteer fire fighter preparedness fundas one checkoff on the tax return. The department of revenue, on or before January 31, shalltransfer one-half of the total amount designated on the tax return forms due in the precedingcalendar year to the veterans trust fund and the remaining one-half to the volunteer fire fighterpreparedness fund. However, before a checkoff pursuant to this section shall be permitted, allliabilities on the books of the department of administrative services and accounts identifiedas owing under section 8A.504 shall be satisfied.3. The department of revenue shall adopt rules to administer this section.4. This section is subject to repeal under section 422.12E.2019 Acts, ch 152, §50Referred to in §422.16NEW section

422.12H Income tax checkoff for fish and game protection fund.1. A person who files an individual or a joint income tax return with the department

of revenue under section 422.13 may designate a contribution to the state fish and gameprotection fund authorized pursuant to section 456A.16.















https://www.legis.iowa.gov/docs/code/422.12G.pdf



https://www.legis.iowa.gov/docs/code/422.12K.pdf

















§422.12H, INDIVIDUAL INCOME, CORPORATE, AND FRANCHISE TAXES 52

2. This section is subject to repeal under section 422.12E.2006 Acts, ch 1158, §28; 2019 Acts, ch 152, §51Referred to in §422.16Section amended

422.12I Income tax checkoff for the Iowa state fair foundation fund.1. A person who files an individual or a joint income tax return with the department of

revenue under section 422.13 may designate one dollar or more to be paid to the foundationfund of the Iowa state fair foundation as established in section 173.22. If the refund due on thereturn or the payment remitted with the return is insufficient to pay the amount designated bythe taxpayer to the foundation fund, the amount designated shall be reduced to the remainingamount of the refund or the remaining amount remitted with the return. The designation ofa contribution to the foundation fund under this section is irrevocable.2. The director of revenue shall draft the income tax form to allow the designation of

contributions to the foundation fund on the tax return. The department, on or before January31, shall transfer the total amount designated on the tax form due in the preceding year to thefoundation fund. However, before a checkoff pursuant to this section shall be permitted, allliabilities on the books of the department of administrative services and accounts identifiedas owing under section 8A.504 shall be satisfied.3. The Iowa state fair boardmay authorize payment from the foundation fund for purposes

of supporting foundation activities.4. The department of revenue shall adopt rules to implement this section.5. This section is subject to repeal under section 422.12E.2019 Acts, ch 152, §52Referred to in §173.22, 422.16NEW section

422.12J Income tax checkoff for Iowa election campaign fund. Repealed by 2017 Acts,ch 144, §13, 14.

422.12K Income tax checkoff for child abuse prevention program fund.1. A person who files an individual or a joint income tax return with the department of

revenue under section 422.13 may designate one dollar or more to be paid to the child abuseprevention program fund created in section 235A.2. If the refund due on the return or thepayment remitted with the return is insufficient to pay the additional amount designated bythe taxpayer to the child abuse prevention program fund, the amount designated shall bereduced to the remaining amount remitted with the return. The designation of a contributionto the child abuse prevention program fund under this section is irrevocable.2. The director of revenue shall draft the income tax form to allow the designation of

contributions to the child abuse prevention program fund on the tax return. The departmentof revenue, on or before January 31, shall transfer the total amount designated on the taxreturn forms due in the preceding calendar year to the child abuse prevention program fund.However, before a checkoff pursuant to this section shall be permitted, all liabilities on thebooks of the department of administrative services and accounts identified as owing undersection 8A.504 shall be satisfied.3. The department of human services may authorize payment of moneys from the child

abuse prevention program fund in accordance with section 235A.2.4. The department of revenue shall adopt rules to administer this section.5. This section is subject to repeal under section 422.12E.2012 Acts, ch 1097, §4, 6; 2017 Acts, ch 144, §7, 14Referred to in §422.16

422.12L Joint income tax checkoff for veterans trust fund and volunteer fire fighterpreparedness fund. Repealed by its own terms; 2014 Acts, ch 1141, §60 – 62. See §422.12G.

































422.12M Income tax form — indication of dependent child health carecoverage. Repealed by 2017 Acts, ch 161, §1 – 3.Section repeal takes effect May 11, 2017, and applies retroactively to January 1, 2017, for tax years beginning on or after that date; 2017

Acts, ch 161, §2, 3

422.12N Geothermal heat pump tax credit.1. The taxes imposed under this division, less the credits allowed under section 422.12,

shall be reduced by a geothermal heat pump tax credit equal to twenty percent of the federalresidential energy efficient property tax credit allowed for geothermal heat pumps providedin section 25D(a)(5) of the Internal Revenue Code for residential property located in Iowa.2. Any credit in excess of the tax liability is not refundable but the excess for the tax year

may be credited to the tax liability for the following ten years or until depleted, whichever isearlier.3. The department shall accept and approve applications on a first-come, first-served basis

until the maximum amount of tax credits that may be claimed pursuant to subsection 4 isreached. If for a tax year the aggregate amount of tax credits applied for exceeds the amountspecified in subsection 4, the department shall establish a wait list for tax credits. Validapplications filed by the taxpayer by May 1 following the year of the installation but notapproved by the department shall be placed on a wait list in the order the applications werereceived and those applicants shall be given priority for having their applications approvedin succeeding years. Placement on a wait list pursuant to this subsection shall not constitutea promise binding the state. The availability of a tax credit and approval of a tax creditapplication pursuant to this section in a future year is contingent upon the availability of taxcredits in that particular year.4. a. The cumulative value of tax credits claimed annually by applicants pursuant to this

section shall not exceed one million dollars.b. If an amount of tax credits available for a tax year pursuant to paragraph “a” goes

unclaimed, the amount of the unclaimed tax credits shall be made available for the followingtax year in addition to, and cumulated with, the amount available pursuant to paragraph “a”for the following tax year.5. The director of revenue shall adopt rules to implement this section.2019 Acts, ch 152, §67 – 69Referred to in §422.16Section applies retroactively to January 1, 2019, for tax years beginning on or after that date; 2019 Acts, ch 152, §69NEW section

422.13 Return by individual.1. A resident or nonresident of this state shall make a return, signed in accordance with

forms and rules prescribed by the director, if any of the following are applicable:a. The individual is claimed as a dependent on another person’s return and has net income

of five thousand dollars or more for the tax year from sources taxable under this division.b. The net income of a nonresident which is allocated to Iowa pursuant to section 422.8,

subsection 2, is one thousand dollars or more for the tax year from sources taxable underthis division, unless the nonresident’s total net income, as determined under section 422.5,subsection 3 or 3B, does not exceed the appropriate dollar amount listed in section 422.5,subsection 3 or 3B, uponwhich tax is not imposed. The portion of a lump sumdistribution thatis allocable to Iowa is included in net income for purposes of determining if the nonresident’snet income allocable to Iowa is one thousand dollars or more.c. A nonresident is subject to the state alternative minimum tax imposed pursuant to

section 422.5, subsection 2.d. The total net income, as determined under section 422.5, subsection 3 or 3B, of a

resident of this state is more than the appropriate dollar amount listed in section 422.5,subsection 3 or 3B, upon which tax is not imposed.2. For purposes of determining the requirement for filing a return under subsection 1, the

combined net income of a husband and wife from sources taxable under this division shallbe considered.3. If the taxpayer is unable to make the return, the return shall be made by a duly





























authorized agent or by a guardian or other person charged with the care of the person orproperty of the taxpayer.4. A nonresident taxpayer shall file a copy of the taxpayer’s federal income tax return for

the current tax year with the return required by this section.5. a. Notwithstanding subsections 1 through 4 and sections 422.15 and 422.36, a

partnership, a limited liability company whose members are taxed on the company’s incomeunder provisions of the Internal Revenue Code, trust, or corporation whose stockholders aretaxed on the corporation’s income under the provisions of the Internal Revenue Code may,not later than the due date for filing its return for the taxable year, including any extensionthereof, elect to file a composite return for the nonresident partners, members, beneficiaries,or shareholders. Nonresident trusts or estates which are partners, members, beneficiaries,or shareholders in partnerships, limited liability companies, trusts, or S corporations mayalso be included on a composite return. The director may require that a composite returnbe filed under the conditions deemed appropriate by the director. A partnership, limitedliability company, trust, or corporation filing a composite return is liable for tax required tobe shown due on the return.b. Notwithstanding subsections 1 through 4 and sections 422.15 and 422.36, if the director

determines that it is necessary for the efficient administration of this chapter, the directormayrequire that a composite return be filed for nonresidents other than nonresident partners,members, beneficiaries or shareholders in partnerships, limited liability companies, trusts,or S corporations.c. All powers of the director and requirements of the director apply to returns filed under

this subsection including but not limited to the provisions of this division and division VI ofthis chapter.6. Notwithstanding subsections 1 through 5 and sections 422.14 and 422.15, a return is

not required by a taxpayer as provided in section 29C.24.[C35, §6943-f13; C39, §6943.045; C46, 50, 54, 58, 62, 66, 71, 73, 75, 77, 79, 81, §422.13; 82

Acts, ch 1226, §5, 6]87 Acts, ch 214, §3; 87 Acts, 1st Ex, ch 1, §4; 87 Acts, ch 196, §1; 88 Acts, ch 1028, §24; 89

Acts, ch 251, §15; 92 Acts, 2nd Ex, ch 1001, §219, 224, 227; 93 Acts, ch 123, §1 – 4; 99 Acts,ch 151, §5, 89; 2000 Acts, ch 1146, §6, 10, 11; 2001 Acts, ch 127, §7, 9, 10; 2007 Acts, ch 186,§15; 2009 Acts, ch 133, §244, 245; 2009 Acts, ch 179, §132; 2012 Acts, ch 1110, §8; 2014 Acts,ch 1093, §20, 21; 2016 Acts, ch 1095, §4, 14, 15; 2017 Acts, ch 157, §7Referred to in §29C.24, 422.8, 422.9, 422.12G, 422.12H, 422.12I, 422.12K, 422.16, 456A.16For future strike of subsection 1, paragraph c, effective on or after January 1, 2023, contingent upon meeting certain net general fund

revenue criteria, see 2018 Acts, ch 1161, §125, 133, 134Subsection 6 takes effect April 21, 2016, and applies retroactively to January 1, 2016, for tax years beginning on or after that date; 2016

Acts, ch 1095, §14, 15

422.14 Return by fiduciary.1. A fiduciary subject to taxation under this division, as provided in section 422.6, shall

make a return, signed in accordance with forms and rules prescribed by the director, for theindividual, estate, or trust for whom or for which the fiduciary acts, if the taxable incomethereof amounts to six hundred dollars or more. A nonresident fiduciary shall file a copy ofthe federal income tax return for the current tax year with the return required by this section.2. Under such regulations as the director may prescribe, a return may be made by one of

two or more joint fiduciaries.3. Fiduciaries required to make returns under this division shall be subject to all the

provisions of this division which apply to individuals.[C35, §6943-f14; C39, §6943.046; C46, 50, 54, 58, 62, 66, 71, 73, 75, 77, 79, 81, §422.14]89 Acts, ch 251, §16Referred to in §29C.24, 421.60, 422.13, 422.16

422.15 Information at source.1. Every person or corporation being a resident of or having a place of business in this

state, including lessees or mortgagors of real or personal property, fiduciaries, employersand all officers and employees of the state or of any political subdivision of the state, oragent of the person or corporation, having the control, receipt, custody, disposal or payment
































































of interest other than interest coupons payable to bearer, rent, salaries, wages, premiums,annuities, compensations, remunerations, emoluments, unemployment compensation,royalties, patronage dividends, or other fixed or determinable annual or periodical gains,profits and income, in an amount sufficient to require that an information return be filedunder the Internal Revenue Code if the income is subject to federal tax, paid or payableduring any year to any individual, whether a resident of this state or not, shall make acomplete information return under such regulations and in such form and manner and tosuch extent as may be prescribed by the director. However, the person or corporation shallnot be required to file an information return if the information is available to the departmentfrom the internal revenue service.2. Every partnership, including limited partnerships, doing business in this state, or

deriving income from sources within this state as defined in section 422.32, subsection 1,paragraph “g”, shall make a return, stating specifically the net income and capital gains orlosses reported on the federal partnership return, the names and addresses of the partners,and their respective shares in said amounts.3. Every fiduciary shall make a return for the individual, estate, or trust for whom or for

which the fiduciary acts, and shall set forth in such return the taxable income, the namesand addresses of the beneficiaries, and the amounts distributed or distributable to each asreported on the federal fiduciary income tax return. Such return may be made by one or twoor more joint fiduciaries.4. Notwithstanding subsections 1, 2, and 3, or any other provision of this chapter,

withholding of income tax and any reporting requirement shall not be imposed upon aperson, corporation, or withholding agent or any payor of deferred compensation, pensions,or annuities with regard to such payments made to a nonresident of the state.[C35, §6943-f15; C39, §6943.047; C46, 50, 54, 58, 62, 66, 71, 73, 75, 77, 79, 81, §422.15; 82

Acts, ch 1103, §1110]92 Acts, ch 1224, §3, 4; 92 Acts, 2nd Ex, ch 1001, §237, 250; 2004 Acts, ch 1021, §110, 117,

118; 2013 Acts, ch 140, §122 – 124; 2014 Acts, ch 1092, §160; 2017 Acts, ch 29, §120Referred to in §15.107, 29C.24, 422.13, 422.16, 422.38

422.16 Withholding of income tax at source — penalties — interest — declaration ofestimated tax — bond.1. a. Every withholding agent and every employer as defined in this chapter and further

defined in the Internal Revenue Code, with respect to income tax collected at source,making payment of wages to a nonresident employee working in Iowa, or to a residentemployee, shall deduct and withhold from the wages an amount which will approximate theemployee’s annual tax liability on a calendar year basis, calculated on the basis of tables tobe prepared by the department and schedules or percentage rates, based on the wages, to beprescribed by the department. Every employee or other person shall declare to the employeror withholding agent the number of the employee’s or other person’s personal allowancesto be used in applying the tables and schedules or percentage rates. However, no greaternumber of allowances may be declared by the employee or other person than the number towhich the employee or other person is entitled except as allowed under sections 3402(m)(1)and 3402(m)(3) of the Internal Revenue Code and as allowed for the child and dependentcare credit provided in section 422.12C. The claiming of allowances in excess of entitlementis a serious misdemeanor.b. Nonresidents engaged in any facet of feature film, television, or educational production

using the film or videotape disciplines in the state are not subject to Iowa withholding if theemployer has applied to the department for exemption from the withholding requirement andthe department has determined that any nonresident receiving wages would be entitled to acredit against Iowa income taxes paid.c. For the purposes of this subsection, state income tax shall be withheld from pensions,

annuities, other similar periodic payments, and other income payments of those personswhose primary residence is in Iowa in those circumstances in which those persons havefederal income tax withheld from pensions, annuities, other similar periodic payments, and























other income payments under sections 3402(o), 3402(p), 3402(s), 3405(a), 3405(b), and3405(c) of the Internal Revenue Code at a rate to be specified by the department.d. For the purposes of this subsection, state income tax shall be withheld on winnings in

excess of six hundred dollars derived from gambling activities authorized under chapter 99Bor 99G. State income tax shall be withheld on winnings in excess of one thousand dollarsfrom gambling activities authorized under chapter 99D. State income tax shall be withheldon winnings in excess of twelve hundred dollars derived from slot machines authorized underchapter 99F.e. For the purposes of this subsection, state income tax at the rate of six percent shall

be withheld from supplemental wages of employees in those circumstances in which theemployer treats the supplemental wages as wholly separate from regular wages for purposesof withholding and federal income tax is withheld from the supplemental wages under section3402(g) of the Internal Revenue Code.f. Nonresidents engaged in emergency response work or training meeting the

requirements of section 422.7, subsection 57, are not subject to withholding by the applicableelectric utility for which such emergency response work or training is being performed if theelectric utility has applied to the department for exemption from the withholding requirementand the department has determined that the payments received by the nonresidents wouldbe exempt from taxation pursuant to section 422.7, subsection 57.g. Individuals described in section 29C.24 are not subject to withholding, as provided in

that section.2. a. A withholding agent required to deduct and withhold tax under subsections 1 and

12 shall file a return and remit to the department the amount of tax on or before the last dayof the month following the close of the quarterly period on forms prescribed by the director.However, a withholding agent who withholds more than five hundred dollars in any onemonth and not more than five thousand dollars in a semimonthly period shall deposit with thedepartment the amount withheld, with a monthly deposit form as prescribed by the director.The monthly deposit form is due on or before the fifteenth day of the month following themonth of withholding, except that a deposit is not required for the thirdmonth of the calendarquarter. The total quarterly amount, less the amounts deposited for the first twomonths of thequarter, is due with the quarterly return due on or before the last day of the month followingthe close of the quarterly period on forms prescribed by the director. However, a withholdingagent who withholds more than five thousand dollars in a semimonthly period shall depositwith the department the amount withheld, with a semimonthly deposit form as prescribed bythe director. The first semimonthly deposit form for the period from the first of the monththrough the fifteenth of the month is due on the twenty-fifth day of the month in which thewithholding occurs. The second semimonthly deposit form for the period from the sixteenthof the month through the end of the month is due on the tenth day of the month following themonth in which the withholding occurs. A withholding agent must also file a quarterly returnwhich reconciles the amount of tax withheld for the quarter with the amount of semimonthlydeposits. The quarterly return is due on or before the last day of the month following theclose of the quarterly period on forms prescribed by the director.b. Every withholding agent on or before the end of the second month following the close

of the calendar year in which the withholding occurs shall make an annual reporting of taxeswithheld and other information prescribed by the director and send to the department copiesof wage and tax statements with the return. At the discretion of the director, the withholdingagent shall not be required to send wage statements and tax statements with the annualreporting return form if the information is available from the internal revenue service or otherstate or federal agencies.c. If the director has reason to believe that the collection of the tax provided for in

subsections 1 and 12 is in jeopardy, the director may require the employer or withholdingagent to make the report and pay the tax at any time, in accordance with section 422.30.The director may authorize incorporated banks, trust companies, or other depositoriesauthorized by law which are depositories or financial agents of the United States or of thisstate, to receive any tax imposed under this chapter, in the manner, at the times, and underthe conditions the director prescribes. The director shall also prescribe the manner, times,




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and conditions under which the receipt of the tax by those depositories is to be treated aspayment of the tax to the department.d. The director, in cooperation with the department of management, may periodically

change the filing and remittance thresholds by administrative rule if in the best interest ofthe state and the taxpayer.3. Every withholding agent employing not more than two persons who expects to employ

either or both of such persons for the full calendar year may, with respect to such persons,pay with the withholding tax return due for the first calendar quarter of the year the fullamount of income taxes required to be withheld from the wages of such persons for the fullcalendar year. The amount to be paid shall be computed as if the employee were employed forthe full calendar year for the same wages and with the same pay periods as prevailed duringthe first quarter of the year with respect to such employee. No such lump sum payment ofwithheld income tax shall be made without the written consent of all employees involved.The withholding agent shall be entitled to recover from the employee any part of such lumpsum payment that represents an advance to the employee. If a withholding agent pays a lumpsum with the first quarterly return the withholding agent shall be excused from filing furtherquarterly returns for the calendar year involved unless the withholding agent hires other oradditional employees.4. Every withholding agent who fails to withhold or pay to the department any sums

required by this chapter to be withheld and paid, shall be personally, individually, andcorporately liable therefor to the state of Iowa, and any sum or sums withheld in accordancewith the provisions of subsections 1 and 12, shall be deemed to be held in trust for the stateof Iowa. Notwithstanding section 489.304, this subsection applies to a member or managerof a limited liability company.5. In the event a withholding agent fails to withhold and pay over to the department any

amount required to be withheld under subsections 1 and 12 of this section, such amount maybe assessed against such employer or withholding agent in the same manner as prescribedfor the assessment of income tax under the provisions of divisions II and VI of this chapter.6. Whenever the director determines that any employer or withholding agent has failed

to withhold or pay over to the department sums required to be withheld under subsections 1and 12 of this section the unpaid amount thereof shall be a lien as defined in section 422.26,shall attach to the property of said employer or withholding agent as therein provided, andin all other respects the procedure with respect to such lien shall apply as set forth in saidsection 422.26.7. a. Every withholding agent required to deduct and withhold a tax under subsections

1 and 12 of this section shall furnish to such employee, nonresident, or other person inrespect of the remuneration paid by such employer or withholding agent to such employee,nonresident, or other person during the calendar year, on or before January 31 of thesucceeding year, or, in the case of employees, if the employee’s employment is terminatedbefore the close of such calendar year, within thirty days from the day on which the lastpayment of wages is made, if requested by such employee, but not later than January 31 ofthe following year, a written statement showing the following:(1) The name and address of such employer or withholding agent, and the identification

number of such employer or withholding agent.(2) The name of the employee, nonresident, or other person and that person’s federal

social security account number, together with the last known address of such employee,nonresident, or other person to whom wages have been paid during such period.(3) The gross amount of wages, or other taxable income, paid to the employee,

nonresident, or other person.(4) The total amount deducted and withheld as tax under the provisions of subsections 1

and 12 of this section.(5) The total amount of federal income tax withheld.b. The statements required to be furnished by this subsection in respect of any wages or

other taxable Iowa income shall be in such form or forms as the director may, by regulation,prescribe.8. An employer or withholding agent shall be liable for the payment of the tax required























to be deducted and withheld or the amount actually deducted, whichever is greater, undersubsections 1 and 12 of this section; and any amount deducted and withheld as tax undersubsections 1 and 12 of this section during any calendar year upon thewages of any employee,nonresident, or other person shall be allowed as a credit to the employee, nonresident, orother person against the tax imposed by section 422.5, irrespective of whether or not suchtax has been, or will be, paid over by the employer or withholding agent to the departmentas provided by this chapter.9. The amount of any overpayment of the individual income tax liability of the employee

taxpayer, nonresident, or other personwhichmay result from thewithholding and payment ofwithheld tax by the employer or withholding agent to the department under subsections 1 and12, as compared to the individual income tax liability of the employee taxpayer, nonresident,or other person properly and correctly determined under the provisions of section 422.4, toand including section 422.25, may be credited against any income tax or installment thereofthen due the state of Iowa and any balance of one dollar or more shall be refunded to theemployee taxpayer, nonresident, or other person with interest in accordance with section421.60, subsection 2, paragraph “e”. Amounts less than one dollar shall be refunded to thetaxpayer, nonresident, or other person only upon written application, in accordance withsection 422.73, and only if the application is filed within twelve months after the due dateof the return. Refunds in the amount of one dollar or more provided for by this subsectionshall be paid by the treasurer of state by warrants drawn by the director of the departmentof administrative services, or an authorized employee of the department, and the taxpayer’sreturn of income shall constitute a claim for refund for this purpose, except in respect toamounts of less than one dollar. There is appropriated, out of any funds in the state treasurynot otherwise appropriated, a sum sufficient to carry out the provisions of this subsection.10. a. An employer or withholding agent required under this chapter to furnish a

statement required by this chapter who willfully furnishes a false or fraudulent statement,or who willfully fails to furnish the statement is, for each failure, subject to a civil penalty offive hundred dollars, the penalty to be in addition to any criminal penalty otherwise providedby the Code.b. In addition to the tax or additional tax, any person or withholding agent shall pay

a penalty as provided in section 421.27. The taxpayer shall also pay interest on the taxor additional tax at the rate in effect under section 421.7, for each month counting eachfraction of a month as an entire month, computed from the date the semimonthly, monthly,or quarterly deposit form was required to be filed. The penalty and interest become a part ofthe tax due from the withholding agent.c. If any withholding agent, being a domestic or foreign corporation, required under the

provisions of this section to withhold on wages or other taxable Iowa income subject to thischapter, fails to withhold the amounts required to be withheld, make the required returnsor remit to the department the amounts withheld, the director may, having exhausted allother means of enforcement of the provisions of this chapter, certify such fact or facts tothe secretary of state, who shall thereupon cancel the articles of incorporation or certificateof authority, as the case may be, of such corporation, and the rights of such corporation tocarry on business in the state of Iowa shall thereupon cease. The secretary of state shallimmediately notify by registeredmail such domestic or foreign corporation of the action takenby the secretary of state. The provisions of section 422.40, subsection 3, shall be applicable.d. The department shall upon request of any fiduciary furnish said fiduciary with a

certificate of acquittance showing that no liability as a withholding agent exists with respectto the estate or trust for which said fiduciary acts, provided the department has determinedthat there is no such liability.11. a. A person or married couple filing a return shall make estimated tax payments if

the person’s or couple’s Iowa income tax attributable to income other than wages subject towithholding can reasonably be expected to amount to two hundred dollars or more for thetaxable year, except that, in the cases of farmers and fishermen, the exceptions provided inthe Internal Revenue Code with respect to making estimated payments apply. The estimatedtax shall be paid in quarterly installments. The first installment shall be paid on or beforethe last day of the fourth month of the taxpayer’s tax year for which the estimated payments



























apply. The other installments shall be paid on or before the last day of the sixth month of thetax year, the last day of the ninthmonth of the tax year, and the last day of the first month afterthe tax year. However, at the election of the person or married couple, an installment of theestimated tax may be paid prior to the date prescribed for its payment. If a person or marriedcouple filing a return has reason to believe that the person’s or couple’s Iowa income taxmay increase or decrease, either for purposes of meeting the requirement to make estimatedtax payments or for the purpose of increasing or decreasing estimated tax payments, theperson or married couple shall increase or decrease any subsequent estimated tax paymentsaccordingly.b. In the case of persons or married couples filing jointly, the total balance of the tax

payable after credits for taxes paid through withholding, as provided in subsection 1 of thissection, or through payment of estimated tax, or a combination of withholding and estimatedtax payments is due and payable on or before April 30 following the close of the calendaryear, or if the return is to be made on the basis of a fiscal year, then on or before the last dayof the fourth month following the close of the fiscal year.c. If a taxpayer is unable to make the taxpayer’s estimated tax payments, the payments

may be made by a duly authorized agent, or by the guardian or other person charged withthe care of the person or property of the taxpayer.d. Any amount of estimated tax paid is a credit against the amount of tax found payable

on a final, completed return, as provided in subsection 9, relating to the credit for the taxwithheld against the tax found payable on a return properly and correctly prepared undersections 422.5 through 422.25, and any overpayment of one dollar or more shall be refundedto the taxpayer and the return constitutes a claim for refund for this purpose. Amounts lessthan one dollar shall not be refunded. The method provided by the Internal Revenue Codefor determining what is applicable to the addition to tax for underpayment of the tax payableapplies to persons required to make payments of estimated tax under this section except theamount to be added to the tax for underpayment of estimated tax is an amount determinedat the rate in effect under section 421.7. This addition to tax specified for underpayment ofthe tax payable is not subject to waiver provisions relating to reasonable cause, except asprovided in the Internal Revenue Code. Underpayment of estimated tax shall be determinedin the same manner as provided under the Internal Revenue Code and the exceptions in theInternal Revenue Code also apply.e. In lieu of claiming a refund, the taxpayer may elect to have the overpayment shown

on the taxpayer’s final, completed return for the taxable year credited to the taxpayer’s taxliability for the following taxable year.12. a. In the case of nonresidents having income subject to taxation by Iowa, but not

subject to withholding of such tax under subsection 1 hereof, withholding agents shallwithhold from such income at the same rate as provided in subsection 1 hereof, and suchwithholding agents and such nonresidents shall be subject to the provisions of this section,according to the context, except that such withholding agents may be absolved of suchrequirement to withhold taxes from such nonresident’s income upon receipt of a certificatefrom the department issued in accordance with the provisions of section 422.17, as herebyamended. In the case of nonresidents having income from a trade or business carried on bythem in whole or in part within the state of Iowa, such nonresident shall be considered to besubject to the provisions of this subsection unless such trade or business is of such naturethat the business entity itself, as a withholding agent, is required to and does withhold Iowaincome tax from the distributions made to such nonresident from such trade or business.b. Notwithstanding this subsection, withholding agents are not required to withhold

state income tax from payments subject to taxation made to nonresidents for commoditycredit certificates, grain, livestock, domestic fowl, or other agricultural commodities orproducts sold to the withholding agents by the nonresidents or their representatives, if thewithholding agents provide on forms prescribed by the department information relatingto the sales required by the department to determine the state income tax liabilities of thenonresidents. However, the withholding agents may elect to make estimated tax paymentson behalf of the nonresidents on the basis of the net incomes of the nonresidents from the
















agricultural commodities or products, if the estimated tax payments are made on or beforethe last day of the first month after the end of the tax years of the nonresidents.c. Notwithstanding this subsection, withholding agents are not required to withhold state

income tax from a partner’s pro rata share of income from a publicly traded partnership, asdefined in section 7704(b) of the Internal Revenue Code, provided that the publicly tradedpartnership files with the department an information return that reports the name, address,taxpayer identification number, and any other information requested by the department foreach unit holder with an income in this state from the publicly traded partnership in excessof five hundred dollars.13. The director shall enter into an agreement with the secretary of the treasury of

the United States with respect to withholding of income tax as provided by this chapter,pursuant to an Act of Congress, section 1207 of the Tax Reform Act of 1976, Pub. L. No.94-455, amending 5 U.S.C. §5517.14. a. The director may, when necessary and advisable in order to secure the collection of

the tax required to be deducted and withheld or the amount actually deducted, whichever isgreater, require an employer or withholding agent to file with the director a bond, issued by asurety company authorized to conduct business in this state and approved by the insurancecommissioner as to solvency and responsibility, in an amount as the director may fix, tosecure the payment of the tax and penalty due or which may become due. In lieu of the bond,securities shall be kept in the custody of the department and may be sold by the directorat public or private sale, without notice to the depositor, if it becomes necessary to do so inorder to recover any tax and penalty due. Upon a sale, any surplus above the amounts dueunder this section shall be returned to the employer or withholding agent who deposited thesecurities.b. If the withholding agent fails to file the bond as requested by the director to secure

collection of the tax, the withholding agent is subject to penalty for failure to file the bond.The penalty is equal to fifteen percent of the tax the withholding agent is required to withholdon an annual basis. However, the penalty shall not exceed five thousand dollars.[C39, §6943.048; C46, 50, 54, 58, 62, 66, 71, 73, 75, 77, 79, 81, §422.16; 81 Acts, ch 131, §4

– 6, ch 133, §1, 4; 82 Acts, ch 1022, §1, 2, 8, ch 1023, §29, ch 1180, §2, 8]83 Acts, ch 160, §3, 4; 83 Acts, ch 179, §11; 84 Acts, ch 1173, §4; 86 Acts, ch 1007, §23 – 25;

86 Acts, ch 1208, §1; 86 Acts, ch 1241, §16; 87 Acts, ch 115, §55; 87 Acts, ch 214, §4; 87 Acts,1st Ex, ch 1, §26; 88 Acts, ch 1028, §25, 26; 88 Acts, ch 1157, §1; 89 Acts, ch 6, §4, 5; 89 Acts,ch 251, §17, 18; 90 Acts, ch 1172, §8; 90 Acts, ch 1248, §11[Unnumbered paragraph 2 of subsection 1 was inadvertently deleted in the 1991 Code and

1991 Code Supplement]91 Acts, ch 215, §4, 8; 92 Acts, 2nd Ex, ch 1001, §238; 94 Acts, ch 1165, §13 – 15, 45, 47, 48;

99 Acts, ch 151, §6, 89; 2002 Acts, ch 1151, §6; 2003 Acts, ch 145, §286; 2003 Acts, ch 178,§111, 121; 2003 Acts, ch 179, §142; 2004 Acts, ch 1101, §46; 2005 Acts, ch 140, §40, 73; 2006Acts, ch 1010, §101; 2007 Acts, ch 185, §3; 2007 Acts, ch 186, §16; 2008 Acts, ch 1162, §135,154, 155; 2008 Acts, ch 1184, §54; 2013 Acts, ch 30, §86; 2015 Acts, ch 116, §28 – 30; 2016Acts, ch 1095, §5, 14, 15; 2018 Acts, ch 1161, §5, 15, 16Referred to in §15A.7, 29C.24, 99B.8, 99D.16, 99F.18, 99G.31, 260E.5, 260G.4A, 403.19A, 422.4, 422.17, 422.38, 904.809For future strike of subsection 1, paragraph f, effective on or after January 1, 2023, contingent upon meeting certain net general fund

revenue criteria, see 2018 Acts, ch 1161, §126, 133, 134Subsection 1, paragraph f takes effect June 18, 2015, and applies retroactively to January 1, 2015, for tax years beginning on or after

that date; 2015 Acts, ch 116, §29, 30Subsection 1, paragraph g takes effect April 21, 2016, and applies retroactively to January 1, 2016, for tax years beginning on or after

that date; 2016 Acts, ch 1095, §14, 15

422.16A Job training withholding — certification and transfer.Upon the completion by a business of its repayment obligation for a training project

funded under chapter 260E, including a job training project funded under section 15A.8or repaid in whole or in part by the supplemental new jobs credit from withholding undersection 15A.7 or section 15E.197, Code 2014, the sponsoring community college shall reportto the economic development authority the amount of withholding paid by the businessto the community college during the final twelve months of withholding payments. Theeconomic development authority shall notify the department of revenue of that amount.


























































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The department shall credit to the workforce development fund account established insection 15.342A twenty-five percent of that amount each quarter for a period of ten years.If the amount of withholding from the business or employer is insufficient, the departmentshall prorate the quarterly amount credited to the workforce development fund account.The maximum amount from all employers which shall be transferred to the workforcedevelopment fund account in any year is six million dollars.95 Acts, ch 184, §9; 96 Acts, ch 1180, §17; 97 Acts, ch 98, §1, 3; 98 Acts, ch 1225, §26; 2000

Acts, ch 1196, §9, 10; 2000 Acts, ch 1230, §23, 35; 2001 Acts, ch 188, §26; 2003 Acts, ch 145,§286; 2005 Acts, ch 150, §61, 69; 2011 Acts, ch 118, §85, 89; 2014 Acts, ch 1130, §37; 2014Acts, ch 1132, §14Referred to in §15.342A, 422.16, 422.38

422.17 Certificate issued by department to make payments without withholding.Any nonresident whose Iowa income is not subject to section 422.16, subsection 1, in whole

or in part, and who elects to be governed by section 422.16, subsection 12, to the extent thatthe nonresident pays the entire amount of tax properly estimated on or before the last day ofthe fourth month of the nonresident’s tax year, for the year, may for the year of the electionand payment, be granted a certificate from the department authorizing each withholdingagent, the income fromwhom the nonresident has considered in the payment of estimated taxand to the extent the income is included in the estimate, to make payments of income to thenonresident without withholding tax from those payments. Withholding agents, if paymentsexceed the tax liability estimated by the nonresident as indicated upon the certificate, shallwithhold tax in accordance with section 422.16, subsection 12.[C39, §6943.049; C46, 50, 54, 58, 62, 66, 71, 73, 75, 77, 79, 81, §422.17]86 Acts, ch 1241, §17; 2015 Acts, ch 29, §53Referred to in §422.16, 422.38

422.18 Reserved.

422.19 Scope of nonresidents tax.The tax herein imposed upon certain income of nonresidents shall apply to all such income

actually received by such nonresident regardless of when such income was earned. If thenonresident is reporting on the accrual basis it shall apply to all such income which firstbecame available to the nonresident so that the nonresident might demand payment thereofregardless of when such income was earned. The duty to withhold herein imposed uponwithholding agents shall apply only to amounts paid after June 30, 1937.[C39, §6943.051; C46, 50, 54, 58, 62, 66, 71, 73, 75, 77, 79, 81, §422.19]Referred to in §422.16, 422.38

422.20 Information confidential — penalty.1. It shall be unlawful for any present or former officer or employee of the state to divulge

or to make known in any manner whatever not provided by law to any person the amount orsource of income, profits, losses, expenditures, or any particular thereof, set forth or disclosedin any income return, or to permit any income return or copy thereof or any book containingany abstract or particulars thereof to be seen or examined by any person except as providedby law; and it shall be unlawful for any person to print or publish in any manner whatever notprovided by law any income return, or any part thereof or source of income, profits, losses, orexpenditures appearing in any income return; and any person committing an offense againstthe foregoing provision shall be guilty of a serious misdemeanor. If the offender is an officeror employee of the state, such person shall also be dismissed from office or discharged fromemployment. Nothing herein shall prohibit turning over to duly authorized officers of theUnited States or tax officials of other states state information and income returns pursuantto agreement between the director and the secretary of the treasury of the United States orthe secretary’s delegate or pursuant to a reciprocal agreement with another state.2. It is unlawful for an officer, employee, or agent, or former officer, employee, or

agent of the state to disclose to any person, except as authorized in subsection 1 of thissection, any federal tax return or return information as defined in section 6103(b) of the


































Internal Revenue Code. It is unlawful for a person to whom any federal tax return or returninformation, as defined in section 6103(b) of the Internal Revenue Code, is disclosed in amanner unauthorized by subsection 1 of this section to thereafter print or publish in anymanner not provided by law any such return or return information. A person violating thisprovision is guilty of a serious misdemeanor.3. a. Unless otherwise expressly permitted by section 8A.504, section 8G.4, section

11.41, section 96.11, subsection 6, section 421.17, subsections 22, 23, and 26, section 421.17,subsection 27, paragraph “k”, section 421.17, subsection 31, section 252B.9, section 321.40,subsection 6, sections 321.120, 421.19, 421.28, 422.72, and 452A.63, this section, or anotherprovision of law, a tax return, return information, or investigative or audit information shallnot be divulged to any person or entity, other than the taxpayer, the department, or internalrevenue service for use in a matter unrelated to tax administration.b. This prohibition precludes persons or entities other than the taxpayer, the department,

or the internal revenue service from obtaining such information from the department, and asubpoena, order, or process which requires the department to produce such information to aperson or entity, other than the taxpayer, the department, or internal revenue service for usein a nontax proceeding is void.4. The director may disclose taxpayer identity information to the press and other media

for purposes of notifying persons entitled to tax refunds when the director, after reasonableeffort and lapse of time, has been unable to locate the persons.5. The department may permit, by rule, the disclosure of state tax information to a person

a taxpayer has authorized to receive such state tax information, in the manner prescribed bythe department.[C62, 66, 71, 73, 75, 77, 79, 81, §422.20]87 Acts, ch 199, §6; 88 Acts, ch 1028, §27; 91 Acts, ch 159, §16; 97 Acts, ch 158, §12; 2003

Acts, ch 145, §256; 2008 Acts, ch 1113, §9, 11; 2010 Acts, ch 1146, §14, 26; 2010 Acts, ch 1193,§147, 149; 2011 Acts, ch 122, §51; 2013 Acts, ch 30, §87; 2013 Acts, ch 70, §4, 9; 2019 Acts, ch152, §17Referred to in §257.22, 421.17, 421.19, 421.28, 422.16, 422.38, 422.72, 422D.3, 425.28NEW subsection 5

422.21 Form and time of return.1. Returns shall be in the form the director prescribes, and shall be filed with the

department on or before the last day of the fourth month after the expiration of the tax year.However, cooperative associations as defined in section 6072(d) of the Internal RevenueCode shall file their returns on or before the fifteenth day of the ninth month followingthe close of the taxable year and nonprofit corporations subject to the unrelated businessincome tax imposed by section 422.33, subsection 1A, shall file their returns on or beforethe fifteenth day of the fifth month following the close of the taxable year. If, under theInternal Revenue Code, a corporation is required to file a return covering a tax period ofless than twelve months, the state return shall be for the same period and is due forty-fivedays after the due date of the federal tax return, excluding any extension of time to file. Incase of sickness, absence, or other disability, or if good cause exists, the director may allowfurther time for filing returns. The director shall cause to be prepared blank forms for thereturns and shall cause them to be distributed throughout the state and to be furnished uponapplication, but failure to receive or secure the form does not relieve the taxpayer from theobligation of making a return that is required. The department may as far as consistent withthe Code draft income tax forms to conform to the income tax forms of the internal revenuedepartment of the United States government. Each return by a taxpayer upon whom a tax isimposed by section 422.5 shall show the county of the residence of the taxpayer.2. An individual in the armed forces of the United States serving in an area designated

by the president of the United States or the United States Congress as a combat zoneor as a qualified hazardous duty area, or deployed outside the United States away fromthe individual’s permanent duty station while participating in an operation designated bythe United States secretary of defense as a contingency operation as defined in 10 U.S.C.§101(a)(13), or which became such a contingency operation by the operation of law, or an

















































individual serving in support of those forces, is allowed the same additional time periodafter leaving the combat zone or the qualified hazardous duty area, or ceasing to participatein such contingency operation, or after a period of continuous hospitalization, to file a stateincome tax return or perform other acts related to the department, as would constitutetimely filing of the return or timely performance of other acts described in section 7508(a)of the Internal Revenue Code. An individual on active duty federal military service in thearmed forces, armed forces military reserve, or national guard who is deployed outside theUnited States in other than a combat zone, qualified hazardous duty area, or contingencyoperation is allowed the same additional period of time described in section 7508(a) of theInternal Revenue Code to file a state income tax return or perform other acts related tothe department. For the purposes of this subsection, “other acts related to the department”includes filing claims for refund for any tax administered by the department, making taxpayments other than withholding payments, filing appeals on the tax matters, filing othertax returns, and performing other acts described in the department’s rules. The additionaltime period allowed applies to the spouse of the individual described in this subsection to theextent the spouse files jointly or separately on the combined return form with the individualor when the spouse is a party with the individual to any matter for which the additional timeperiod is allowed.3. The department shall make available to persons required to make personal income tax

returns under the provisions of this chapter, and when such income is derived mainly fromsalaries and wages or from the operation of a business or profession, a form which shall takeinto consideration the normal deductions and credits allowable to any such taxpayer, andwhich will permit the computation of the tax payable without requiring the listing of specificdeductions and credits. In arriving at schedules for payment of taxation under such formsthe department shall as nearly as possible base such schedules upon a total of deductionsand credits which will result in substantially the same payment as would have been madeby such taxpayer were the taxpayer to specifically list the taxpayer’s allowable deductionsand credits. In lieu of such return any taxpayer may elect to list permissible deductionsand credits as provided by law. It is the intent and purpose of this provision to simplify theprocedure of collection of personal income tax, and the director shall have the power in anycase when deemed necessary or advisable to require any taxpayer, who has made a returnin accordance with the schedule herein provided for, to make an additional return in whichall deductions and credits are specifically listed. The department may revise the schedulesadopted in connection with such simplified form whenever such revision is necessitated bychanges in federal income tax laws, or to maintain the collection of substantially the sameamounts from taxpayers as would be received were the specific listing of deductions andcredits required.4. The department shall provide space on the prescribed income tax form, wherein the

taxpayer shall enter the name of the school district of the taxpayer’s residence. Such placeshall be indicated by prominent type. A nonresident taxpayer shall so indicate. If suchinformation is not supplied on the tax return it shall be deemed an incompleted return.5. The director shall determine for the 1989 and each subsequent calendar year the

annual and cumulative inflation factors for each calendar year to be applied to tax yearsbeginning on or after January 1 of that calendar year. The director shall compute the newdollar amounts as specified to be adjusted in section 422.5 by the latest cumulative inflationfactor and round off the result to the nearest one dollar. The annual and cumulative inflationfactors determined by the director are not rules as defined in section 17A.2, subsection 11.The director shall determine for the 1990 calendar year and each subsequent calendar yearthe annual and cumulative standard deduction factors to be applied to tax years beginningon or after January 1 of that calendar year. The director shall compute the new dollaramounts of the standard deductions specified in section 422.9, subsection 1, by the latestcumulative standard deduction factor and round off the result to the nearest ten dollars. Theannual and cumulative standard deduction factors determined by the director are not rulesas defined in section 17A.2, subsection 11.6. The department shall provide on income tax forms or in the instruction booklets in a

manner that will be noticeable to the taxpayers a statement that, even though the taxpayer










may not have any federal or state income tax liability, the taxpayer may be eligible for thefederal earned income tax credit or state child and dependent care credit. The statement shallalso contain notice of where the taxpayer may check on the taxpayer’s eligibility for thesecredits.7. If married taxpayers file a joint return or file separately on a combined return in

accordance with rules prescribed by the director, both spouses are jointly and severally liablefor the total tax due on the return, except when one spouse is considered to be an innocentspouse under criteria established pursuant to section 6015 of the Internal Revenue Code.[C35, §6943-f17; C39, §6943.053; C46, 50, 54, 58, 62, 66, 71, 73, 75, 77, 79, 81, §422.21]85 Acts, ch 230, §6; 87 Acts, ch 115, §56; 87 Acts, 2nd Ex, ch 1, §11; 88 Acts, ch 1028, §28;

89 Acts, ch 268, §7, 8; 90 Acts, ch 1248, §13; 91 Acts, ch 159, §17; 91 Acts, ch 196, §3; 94 Acts,ch 1165, §16, 48; 2000 Acts, ch 1146, §9, 11; 2002 Acts, ch 1069, §8, 11, 14; 2003 Acts, ch 142,§8, 11; 2009 Acts, ch 47, §1, 2Referred to in §257.23, 422.7(32)(a), 422.16, 422.38, 422D.3For future amendments to subsections 2, 5, and 7, effective on or after January 1, 2023, contingent upon meeting certain net general

fund revenue criteria, see 2018 Acts, ch 1161, §127, 133, 134

422.22 Supplementary returns.If the director shall be of the opinion that any taxpayer required under this division to file

a return has failed to file such a return or to include in a return filed, either intentionally orthrough error, items of taxable income, the director may require from such taxpayer a returnor supplementary return in such form as the director shall prescribe, of all the items of incomewhich the taxpayer received during the year for which the return is made, whether or nottaxable under the provisions of this division. If from a supplementary return, or otherwise,the director finds that any items of income, taxable under this division, have been omittedfrom the original return, the director may require the items so omitted to be added to theoriginal return. Such supplementary return and the correction of the original return shall notrelieve the taxpayer from any of the penalties to which the taxpayer may be liable under anyprovisions of this division, whether or not the director required a return or a supplementaryreturn under this section.[C35, §6943-f18; C39, §6943.054; C46, 50, 54, 58, 62, 66, 71, 73, 75, 77, 79, 81, §422.22]Referred to in §257.22, 422.16, 422.38, 422D.3

422.23 Return by administrator.The return by an individual, who, while living, was subject to income tax in the state during

the tax year, and who has died before making the return, shall be made in the individual’sname and behalf by the administrator or executor of the estate and the tax shall be leviedupon and collected from the individual’s estate. In the making of said return, the executor oradministrator shall use the same method of computation, either cash or accrual, as was lastused by the deceased taxpayer.[C35, §6943-f19; C39, §6943.055; C46, 50, 54, 58, 62, 66, 71, 73, 75, 77, 79, 81, §422.23]86 Acts, ch 1241, §18; 99 Acts, ch 151, §7, 89Referred to in §257.22, 422.16, 422D.3

422.24 Payment — interest.1. For all taxpayers the total tax due shall be paid in full at the time of filing the return.2. When, at the request of the taxpayer, the time for filing the return is extended, interest

at the rate in effect under section 421.7 for each month counting each fraction of a month asan entire month, on the total tax due, from the time when the return was required to be filedto the time of payment, shall be added and paid.[C35, §6943-f20; C39, §6943.056; C46, 50, 54, 58, 62, 66, 71, 73, 75, 77, 79, 81, §422.24; 81

Acts, ch 131, §7]Referred to in §257.22, 422.16, 422.39, 422.66, 422D.3

422.24A Start-up business tax deferment. Repealed by 2008 Acts, ch 1184, §66, 67.

422.25 Computation of tax, interest, and penalties — limitation.1. a. Within three years after the return is filed or within three years after the return




https://www.legis.iowa.gov/docs/acts/1987.2/CH0001.pdf










































became due, including any extensions of time for filing, whichever time is the later, thedepartment shall examine the return and determine the tax. However, if the taxpayer omitsfrom income an amount which will, under the Internal Revenue Code, extend the statuteof limitations for assessment of federal tax to six years under the federal law, the periodfor examination and determination is six years. In addition to the applicable period oflimitation for examination and determination, the department may make an examinationand determination at any time within six months from the date of receipt by the departmentof written notice from the taxpayer of the final disposition of any matter between thetaxpayer and the internal revenue service with respect to the particular tax year. In orderto begin the running of the six-month period, the notice shall be in writing in any formsufficient to inform the department of the final disposition with respect to that year, and acopy of the federal document showing the final disposition or final federal adjustments shallbe attached to the notice.b. The period for examination and determination of the correct amount of tax is unlimited

in the case of a false or fraudulent return made with the intent to evade tax or in the caseof a failure to file a return. In lieu of the period of limitation for any prior year for whichan overpayment of tax or an elimination or reduction of an underpayment of tax due forthat prior year results from the carryback to that prior year of a net operating loss or netcapital loss, the period is the period of limitation for the taxable year of the net operatingloss or net capital loss which results in the carryback. If the tax found due is greater thanthe amount paid, the department shall compute the amount due, together with interest andpenalties as provided in subsection 2, and shall mail a notice of assessment to the taxpayerand, if applicable, to the taxpayer’s authorized representative of the total, which shall becomputed as a sum certain, with interest computed to the last day of the month in which thenotice is dated.2. In addition to the tax or additional tax determined by the department under subsection

1, the taxpayer shall pay interest on the tax or additional tax at the rate in effect under section421.7 for each month counting each fraction of a month as an entire month, computed fromthe date the return was required to be filed. In addition to the tax or additional tax, thetaxpayer shall pay a penalty as provided in section 421.27.3. a. If the amount of the tax as determined by the department is less than the amount

paid, the excess shall be refunded with interest in accordance with section 421.60, subsection2, paragraph “e”.b. Notwithstanding section 421.60, subsection 2, paragraph “e”, and paragraph “a” of

this subsection, when the net operating loss or net capital loss carryback to a prior yeareliminates or reduces an underpayment of tax due for an earlier year, the full amount of theunderpayment of tax shall bear interest at the rate in effect under section 421.7 for eachmonth counting each fraction of a month as an entire month from the due date of the tax forthe earlier year to the last day of the taxable year in which the net operating loss or net capitalloss occurred.4. All payments received must be credited first, to the penalty and interest accrued, and

then to the tax due. For purposes of this subsection, the department shall not reapply priorpayments made by the taxpayer to penalty or interest determined to be due after the dateof those prior payments, except that the taxpayer and the department may agree to applypayments in accordance with rules adopted by the director when there are both agreed andunagreed to items as a result of an examination.5. A person or withholding agent required to supply information, to pay tax, or to make,

sign, or file a deposit form or return required by this division, who willfully makes a false orfraudulent deposit form or return, or willfully fails to pay the tax, supply the information, ormake, sign, or file the deposit form or return, at the time or times required by law, is guiltyof a fraudulent practice.6. The certificate of the director to the effect that a tax has not been paid, that a return has

not been filed, or that information has not been supplied, as required under the provisionsof this division shall be prima facie evidence thereof except as otherwise provided in thissection.7. The periods of limitation provided by this section may be extended by the taxpayer by




















signing a waiver agreement to be provided by the department. The agreement shall stipulatethe period of extension and the year or years to which the extension applies. It shall providethat a claim for refundmay be filed by the taxpayer at any time during the period of extension.8. A person or withholding agent who willfully attempts in any manner to defeat or evade

a tax imposed by this division or the payment of the tax, upon conviction for each offense isguilty of a class “D” felony.9. A prosecution for any offense defined in this section must be commenced within six

years after the commission thereof, and not after.10. If a taxpayer files an amended return within sixty days prior to the expiration of the

applicable period of limitations described in subsection 1, the department has sixty daysfrom the date of receipt of the amended return to issue an assessment for any applicable tax,interest, or penalty.[C35, §6943-f21; C39, §6943.057; C46, 50, 54, 58, 62, 66, 71, 73, 75, 77, 79, 81, §422.25; 81

Acts, ch 131, §8, ch 133, §2, 4, ch 134, §1, 2; 82 Acts, ch 1180, §3, 8]83 Acts, ch 160, §5; 84 Acts, ch 1025, §1; 84 Acts, ch 1173, §5; 86 Acts, ch 1007, §26; 86

Acts, ch 1241, §19; 88 Acts, ch 1028, §29; 89 Acts, ch 251, §19; 90 Acts, ch 1172, §9; 94 Acts,ch 1133, §3, 4, 16; 95 Acts, ch 83, §3, 34; 99 Acts, ch 151, §8, 9, 89; 99 Acts, ch 152, §3, 40;2002 Acts, ch 1150, §5; 2013 Acts, ch 110, §1; 2018 Acts, ch 1161, §6, 15, 16Referred to in §99G.30A, 257.22, 321.105A, 422.16, 422.39, 422.66, 422D.3, 423.42, 423A.6, 423B.6, 423C.4, 423D.4, 423G.5, 428A.8,

452A.662018 amendment to subsection 3 applies retroactively to January 1, 2018, for tax years beginning, and for refunds issued, on or after

that date; 2018 Acts, ch 1161, §16

422.26 Lien of tax — collection — action authorized.1. Whenever any taxpayer liable to pay a tax and penalty imposed refuses or neglects to

pay the same, the amount, including any interest, penalty, or addition to such tax, togetherwith the costs that may accrue in addition thereto, shall be a lien in favor of the state upon allproperty and rights to property, whether real or personal, belonging to said taxpayer.2. The lien shall attach at the time the tax becomes due and payable and shall continue

for ten years from the date an assessment is issued unless sooner released or otherwisedischarged. The lienmay, within ten years from the date an assessment is issued, be extendedby filing for record a notice with the appropriate county official of any county and from thetime of such filing, the lien shall be extended to the property in such county for ten years,unless sooner released or otherwise discharged, with no limit on the number of extensions.The director shall charge off any account whose lien is allowed to lapse and may chargeoff any account and release the corresponding lien before the lien has lapsed if the directordetermines under uniform rules prescribed by the director that the account is uncollectibleor collection costs involved would not warrant collection of the amount due.3. In order to preserve the aforesaid lien against subsequent mortgagees, purchasers or

judgment creditors, for value and without notice of the lien, on any property situated in acounty, the director shall file with the recorder of the county, in which said property is located,a notice of said lien.4. a. The county recorder of each county shall keep in the recorder’s office an index

containing the applicable entries in sections 558.49 and 558.52 and showing the followingdata, under the names of taxpayers, arranged alphabetically:(1) The name of the taxpayer.(2) The name “State of Iowa” as claimant.(3) Time notice of lien was filed for recording.(4) Date of notice.(5) Amount of lien then due.(6) Date of assessment.(7) When satisfied.b. The recorder shall endorse on each notice of lien the day, hour, and minute when filed

for recording and the document reference number, shall preserve the same, and shall indexthe notice in the index and shall record the lien in the manner provided for recording realestate mortgages. The lien is effective from the time of the indexing of the lien.













































5. The department shall pay recording fees as provided in section 331.604, for therecording of the lien, or for its satisfaction.6. Upon the payment of a tax as to which the director has filed notice with a county

recorder, the director shall forthwith file with said recorder a satisfaction of said tax and therecorder shall enter said satisfaction on the notice on file in the recorder’s office and indicatesaid fact on the index aforesaid.7. a. The department shall, substantially as provided in this chapter and chapter 626,

proceed to collect all taxes and penalties as soon as practicable after they become delinquent,except that no property of the taxpayer is exempt from payment of the tax. If service has notbeen made on a distress warrant by the officer to whom addressed within five days from thedate the distress warrant was received by the officer, the authorized revenue agents of thedepartment may serve and make return of the warrant to the clerk of the district court of thecounty named in the distress warrant, and all subsequent procedure shall be in compliancewith chapter 626.b. The distress warrant shall be in a form as prescribed by the director. It shall be directed

to the sheriff of the appropriate county and it shall identify the taxpayer, the tax type, andthe delinquent amount. It shall direct the sheriff to distrain, seize, garnish, or levy upon, andsell, as provided by law, any real or personal property belonging to the taxpayer to satisfy theamount of the delinquency plus costs. It shall also direct the sheriff to make due and promptreturn to the department or to the district court under chapters 626 and 642 of all amountscollected.8. The attorney general shall, upon the request of the director, bring an action at law or in

equity, as the facts may justify, without bond, to enforce payment of any taxes and penalties,and in such action the attorney general shall have the assistance of the county attorney of thecounty in which the action is pending.9. It is expressly provided that the foregoing remedies of the state shall be cumulative and

that no action taken by the director or attorney general shall be construed to be an electionon the part of the state or any of its officers to pursue any remedy hereunder to the exclusionof any other remedy provided by law.10. For purposes of this section, “assessment issued” means the most recent assessment

against the taxpayer for the tax type and tax period.[C35, §6943-f22; C39, §6943.058; C46, 50, 54, 58, 62, 66, 71, 73, 75, 77, 79, 81, S81, §422.26;

81 Acts, ch 117, §1220]90 Acts, ch 1232, §8 – 10; 91 Acts, ch 191, §18, 124; 91 Acts, ch 267, §522; 92 Acts, ch 1016,

§12; 97 Acts, ch 23, §45; 2001 Acts, ch 44, §18; 2006 Acts, ch 1177, §30; 2009 Acts, ch 27, §14Referred to in §257.22, 331.602, 331.607, 421.9, 422.16, 422.39, 422.66, 422D.3, 423.4, 423.42, 425.27, 426C.7, 428A.8, 437A.22, 437B.18,

450.55, 452A.66, 453B.11, 453B.14, 558.41

422.27 Final report of fiduciary — conditions.1. A final account of a personal representative, as defined in section 450.1, shall not be

allowed by any court unless the account shows, and the judge of the court finds, that all taxesimposed by this division upon the personal representative, which have become payable, havebeen paid, and that all taxes which may become due are secured by bond or deposit, or areotherwise secured. The certificate of acquittances of the department of revenue is conclusiveas to the payment of the tax to the extent of the acquittance. This subsection does not applyif all property in the estate of a decedent is held in joint tenancy with right of survivorship byhusband and wife alone.2. For the purpose of facilitating the settlement and distribution of estates held by

fiduciaries, the director may, on behalf of the state, agree upon the amount of taxes at anytime due or to become due from such fiduciaries under the provisions of this division, and












































payment in accordance with such agreement shall be full satisfaction of the taxes to whichthe agreement relates.[C35, §6943-f23; C39, §6943.059; C46, 50, 54, 58, 62, 66, 71, 73, 75, 77, 79, 81, §422.27]85 Acts, ch 148, §1; 86 Acts, ch 1054, §1; 86 Acts, ch 1238, §19; 86 Acts, ch 1241, §20; 90

Acts, ch 1232, §11; 2003 Acts, ch 145, §286Referred to in §257.22, 422.39, 422D.3, 633.479, 635.7Fiduciaries’ reports, §636.33Similar provision, §450.58

422.28 Revision of tax.A taxpayer may appeal to the director for revision of the tax, interest, or penalties assessed

at any time within sixty days from the date of the notice of the assessment of tax, additionaltax, interest, or penalties. The director shall grant a hearing and if, upon the hearing, thedirector determines that the tax, interest, or penalties are excessive or incorrect, the directorshall revise them according to the law and the facts and adjust the computation of the tax,interest, or penalties accordingly. The director shall notify the taxpayer by mail of the resultof the hearing and shall refund to the taxpayer the amount, if any, paid in excess of the tax,interest, or penalties found by the director to be due, with interest accruing in accordancewith section 421.60, subsection 2, paragraph “e”.[C35, §6943-f24; C39, §6943.060; C46, 50, 54, 58, 62, 66, 71, 73, 75, 77, 79, 81, §422.28; 81

Acts, ch 131, §9]86 Acts, ch 1007, §27; 86 Acts, ch 1241, §21; 94 Acts, ch 1133, §5, 16; 2012 Acts, ch 1110,

§9; 2018 Acts, ch 1161, §7, 15, 16Referred to in §257.22, 421.10, 422.29, 422.41, 422.66, 422D.3, 428A.8, 453B.142018 amendment applies retroactively to January 1, 2018, for tax years beginning, and for refunds issued, on or after that date; 2018

Acts, ch 1161, §16

422.29 Judicial review.1. Judicial review of actions of the director may be sought in accordance with the terms

of the Iowa administrative procedure Act, chapter 17A. Notwithstanding the terms of saidAct, petitions for judicial review may be filed in the district court of the county in which thepetitioner resides, or in which the petitioner’s principal place of business is located, or in thecase of a nonresident not maintaining a place of business in this state either in any county inwhich the income involved was earned or derived or in Polk county, within sixty days afterthe petitioner shall have received notice of a determination by the director as provided for insection 422.28.2. For cause and upon a showing by the director that collection of the tax in dispute

is in doubt, the court may order the petitioner to file with the clerk a bond for the use ofthe respondent, with sureties approved by the clerk, in the amount of tax appealed from,conditioned that the petitioner shall perform the orders of the court.3. An appeal may be taken by the taxpayer or the director to the supreme court of this

state irrespective of the amount involved.[C35, §6943-f25; C39, §6943.061; C46, 50, 54, 58, 62, 66, 71, 73, 75, 77, 79, 81, §422.29]94 Acts, ch 1133, §6, 16; 2003 Acts, ch 44, §114Referred to in §257.22, 422.41, 422.66, 422D.3, 428A.8, 453A.29, 453A.46, 453B.14, 602.8102(60)

422.30 Jeopardy assessments — posting of bond.1. If the director believes that the assessment or collection of taxes will be jeopardized by

delay, the director may immediately make an assessment of the estimated amount of tax due,together with all interest, additional amounts, or penalties, as provided by law. The directorshall serve the taxpayer by regular mail at the taxpayer’s last known address or in person,with a written notice of the amount of tax, interest, and penalty due, which noticemay includea demand for immediate payment. Service of the notice by regular mail is complete uponmailing. A distress warrant may be issued or a lien filed against the taxpayer immediately.2. The director shall be permitted to accept a bond from the taxpayer to satisfy collection

until the amount of tax legally due shall be determined. Such bond to be in an amount deemed













































necessary, but not more than double the amount of the tax involved, and with securitiessatisfactory to the director.[C35, §6943-f26; C39, §6943.062; C46, 50, 54, 58, 62, 66, 71, 73, 75, 77, 79, 81, §422.30]94 Acts, ch 1165, §17; 2018 Acts, ch 1041, §91, 127Referred to in §99G.30A, 257.22, 321.105A, 422.16, 422.41, 422.66, 422D.3, 423.42, 423A.6, 423B.6, 423C.4, 423D.4, 423G.5, 425.27,

426C.7, 428A.8, 450.55, 453B.9

422.31 Statute applicable to personal tax.All the provisions of section 422.36, subsection 3, shall be applicable to persons taxable

under this division.[C35, §6943-f27; C39, §6943.063; C46, 50, 54, 58, 62, 66, 71, 73, 75, 77, 79, 81, §422.31]Referred to in §257.22, 422D.3

DIVISION III

BUSINESS TAX ON CORPORATIONS

Referred to in §15.293A, 15.319, 15.333, 15.355, 15E.43, 15E.44, 15E.52, 15E.62, 15E.305, 16.64, 16.82, 16.82A, 28A.24, 29C.24, 190B.103,404A.2, 422.1, 422.73, 422.85, 422.110, 428A.8, 476B.2, 476B.6, 476B.7, 476C.4, 476C.6

422.32 Definitions.1. For the purpose of this division and unless otherwise required by the context:a. “Affiliated group” means a group of corporations as defined in section 1504(a) of the

Internal Revenue Code.b. “Business income” means income arising from transactions and activity in the regular

course of the taxpayer’s trade or business; or income from tangible and intangible propertyif the acquisition, management, and disposition of the property constitute integral parts ofthe taxpayer’s regular trade or business operations; or gain or loss resulting from the sale,exchange, or other disposition of real property or of tangible or intangible personal property,if the property while owned by the taxpayer was operationally related to the taxpayer’s tradeor business carried on in Iowa or operationally related to sources within Iowa, or the propertywas operationally related to sources outside this state and to the taxpayer’s trade or businesscarried on in Iowa; or gain or loss resulting from the sale, exchange, or other dispositionof stock in another corporation if the activities of the other corporation were operationallyrelated to the taxpayer’s trade or business carried on in Iowa while the stock was owned bythe taxpayer. A taxpayer may have more than one regular trade or business in determiningwhether income is business income.(1) It is the intent of the general assembly to treat as apportionable business income all

income that may be treated as apportionable business income under the Constitution of theUnited States.(2) The filing of an Iowa income tax return on a combined report basis is neither allowed

nor required by this paragraph “b”.c. “Commercial domicile” means the principal place from which the trade or business of

the taxpayer is directed or managed.d. “Corporation” includes joint stock companies, and associations organized for

pecuniary profit, and partnerships and limited liability companies taxed as corporationsunder the Internal Revenue Code.e. “Domestic corporation” means any corporation organized under the laws of this state.f. “Foreign corporation” means any corporation other than a domestic corporation.g. “Income from sources within this state”means income from real, tangible, or intangible

property located or having a situs in this state.h. “Internal Revenue Code” means one of the following:(1) For tax years beginning during the 2019 calendar year, “Internal Revenue Code”

means the Internal Revenue Code of 1954, prior to the date of its redesignation as the InternalRevenue Code of 1986 by the Tax Reform Act of 1986, or means the Internal Revenue Codeof 1986 as amended and in effect on March 24, 2018. This definition shall not be construed toinclude any amendment to the Internal Revenue Code enacted after the date specified in thepreceding sentence, including any amendment with retroactive applicability or effectiveness.






















































(2) For tax years beginning on or after January 1, 2020, “Internal Revenue Code” meansthe Internal Revenue Code of 1954, prior to the date of its redesignation as the InternalRevenue Code of 1986 by the Tax Reform Act of 1986, or means the Internal Revenue Codeof 1986, as amended.i. “Nonbusiness income” means all income other than business income.j. “State” means any state of the United States, the District of Columbia, the

Commonwealth of Puerto Rico, any territory or possession of the United States, and anyforeign country or political subdivision thereof.k. “Taxable in another state”. For purposes of allocation and apportionment of income

under this division, a taxpayer is “taxable in another state” if:(1) In that state the taxpayer is subject to a net income tax, a franchise tax measured by

net income, a franchise tax for the privilege of doing business, or a corporate stock tax; or(2) That state has jurisdiction to subject the taxpayer to a net income tax regardless of

whether, in fact, the state does or does not.l. “Unitary business”means a business carried on partly within and partly without a state

where the portion of the business carried on within the state depends on or contributes to thebusiness outside the state.2. The words, terms, and phrases defined in section 422.4, subsections 4, 5, 6, 8, 9, 13, 15,

16, and 17, when used in this division, shall have the meanings ascribed to them in section422.4, except where the context clearly indicates a different meaning.[C35, §6943-f28; C39, §6943.064; C46, 50, 54, 58, 62, 66, 71, 73, 75, 77, 79, 81, §422.32; 81

Acts, ch 132, §7, 9; 82 Acts, ch 1023, §11, 30, ch 1103, §1111, ch 1203, §1]83 Acts, ch 179, §12, 13, 21, 23; 84 Acts, ch 1305, §33, 34; 87 Acts, 1st Ex, ch 1, §5; 88 Acts,

ch 1028, §30 – 32, 55; 92 Acts, ch 1151, §7; 94 Acts, ch 1165, §18; 95 Acts, ch 141, §1 – 3; 97Acts, ch 158, §13, 49; 99 Acts, ch 152, §4, 40; 2003 Acts, ch 139, §8, 11, 12; 2004 Acts, 1st Ex,ch 1001, §39, 41, 42; 2005 Acts, ch 24, §7, 10, 11; 2006 Acts, ch 1140, §6, 10, 11; 2007 Acts, ch12, §5, 7, 8; 2008 Acts, ch 1011, §6, 9; 2009 Acts, ch 60, §6; 2011 Acts, ch 25, §40; 2011 Acts,ch 41, §4 – 6; 2012 Acts, ch 1007, §5, 7, 8; 2013 Acts, ch 1, §5, 7, 8; 2013 Acts, ch 30, §88; 2014Acts, ch 1076, §4, 6, 7; 2014 Acts, ch 1092, §89; 2015 Acts, ch 1, §5, 7, 8; 2017 Acts, ch 157,§8; 2018 Acts, ch 1026, §130; 2018 Acts, ch 1161, §87, 97, 98; 2019 Acts, ch 24, §50Referred to in §422.7(21)(e), 422.15Internal Revenue Code definition is updated regularly; for applicable definition in a prior tax year, refer to Iowa Acts and Code for that


2015, and for tax years beginning during the 2015 calendar year, see 2016 Acts, ch 1007, §1, 4, 52018 amendment to subsection 1, paragraph h, effective January 1, 2019, and applies to tax years beginning on or after that date; 2018

Acts, ch 1161, §97, 98Subsection 2 amended

422.33 Corporate tax imposed — credit.1. A tax is imposed annually upon each corporation doing business in this state, or

deriving income from sources within this state, in an amount computed by applying thefollowing rates of taxation to the net income received by the corporation during the incomeyear:a. On the first twenty-five thousand dollars of taxable income, or any part thereof, the

rate of six percent for tax years beginning prior to January 1, 2021, and the rate of five andone-half percent for tax years beginning on or after January 1, 2021.b. On taxable income between twenty-five thousand dollars and one hundred thousand

dollars or any part thereof, the rate of eight percent for tax years beginning prior to January1, 2021, and the rate of five and one-half percent for tax years beginning on or after January1, 2021.c. On taxable income between one hundred thousand dollars and two hundred fifty

thousand dollars or any part thereof, the rate of ten percent for tax years beginning priorto January 1, 2021, and the rate of nine percent for tax years beginning on or after January1, 2021.d. On taxable income of two hundred fifty thousand dollars or more, the rate of twelve

percent for tax years beginning prior to January 1, 2021, and the rate of nine and eight-tenthspercent for tax years beginning on or after January 1, 2021.




















































1A. There is imposed upon each corporation exempt from the general business tax oncorporations by section 422.34, subsection 2, a tax at the rates in subsection 1 upon the state’sapportioned share computed in accordancewith subsections 2 and 3 of the unrelated businessincome computed in accordance with the Internal Revenue Code and with the adjustmentsset forth in section 422.35.2. a. If the trade or business of the corporation is carried on entirely within the state,

the tax shall be imposed on the entire net income, but if the trade or business is carried onpartly within and partly without the state or if income is derived from sources partly withinand partly without the state, or if income is derived from trade or business and sources, allof which are not entirely in the state, the tax shall be imposed only on the portion of the netincome reasonably attributable to the trade or business or sources within the state, with thenet income attributable to the state to be determined as follows:(1) Nonbusiness interest, dividends, rents and royalties, less related expenses, shall be

allocated within and without the state in the following manner:(a) Nonbusiness interest, dividends, and royalties from patents and copyrights shall be

allocable to this state if the taxpayer’s commercial domicile is in this state.(b) Nonbusiness rents and royalties received from real property located in this state are

allocable to this state.(c) Nonbusiness rents and royalties received from tangible personal property are allocable

to this state to the extent that the property is utilized in this state; or in their entirety if thetaxpayer’s commercial domicile is in this state and the taxpayer is not taxable in the statein which the property is utilized. The extent of utilization of tangible personal property ina state is determined by multiplying the rents and royalties by a fraction, the numerator ofwhich is the number of days of physical location of the property in the state during the rentalor royalty period in the taxable year and the denominator of which is the number of days ofphysical location of the property everywhere during all rental or royalty periods in the taxableyear. If the physical location of the property during the rental or royalty period is unknownor unascertainable by the taxpayer, tangible personal property is utilized in the state in whichthe property was located at the time the rental or royalty payor obtained possession.(d) Nonbusiness capital gains and losses from the sale or other disposition of assets shall

be allocated as follows:(i) Gains and losses from the sale or other disposition of real property located in this state

are allocable to this state.(ii) Gains and losses from the sale or other disposition of tangible personal property

are allocable to this state if the property had a situs in this state at the time of the sale ordisposition or if the taxpayer’s commercial domicile is in this state and the taxpayer is nottaxable in the state in which the property had a situs.(iii) Gains and losses from the sale or disposition of intangible personal property are

allocable to this state if the taxpayer’s commercial domicile is in this state.(2) Net nonbusiness income of the above class having been separately allocated and

deducted as above provided, the remaining net business income of the taxpayer shall beallocated and apportioned as follows:(a) Business interest, dividends, rents, and royalties shall be reasonably apportioned

within and without the state under rules adopted by the director.(b) Capital gains and losses from the sale or other disposition of assets shall be

apportioned to the state based upon the business activity ratio applicable to the year the gainor loss is determined if the corporation determines Iowa taxable income by a sales, grossreceipts or other business activity ratio. If the corporation has only allocable income, capitalgains and losses from the sale or other disposition of assets shall be allocated in accordancewith subparagraph (1), subparagraph division (d).(c) Where income is derived from business other than the manufacture or sale of tangible

personal property, the income shall be specifically allocated or equitably apportioned withinand without the state under rules of the director.(d) Where income is derived from the manufacture or sale of tangible personal property,

the part attributable to business within the state shall be in that proportion which the grosssales made within the state bear to the total gross sales.







(e) (i) Notwithstanding subparagraph division (c), where income is derived by abroadcaster from broadcasting, the part attributable to business within the state shall bein the proportion that the gross receipts from broadcasting derived from customers whosecommercial domicile is in this state bears to the total gross receipts from broadcasting.(ii) Notwithstanding subparagraph subdivision (i) or subparagraph division (c), where

income is derived by a broadcaster from national or local political advertising that is directedexclusively at one or more markets in this state, all gross receipts from such advertising shallbe attributable to business within the state.(iii) For purposes of this subparagraph division:(A) “Broadcaster” means a taxpayer who is engaged in the business of broadcasting.

“Broadcaster” includes a television network, a cable program network, and a televisiondistribution company. “Broadcaster” does not include a cable system operator, a directbroadcast satellite system operator, or a television or radio station licensed by the federalcommunications commission.(B) “Broadcasting” means the transmission of film programming by an electronic or

other signal conducted by microwaves, wires, lines, coaxial cables, wave guides, fiber optics,satellite transmissions, or through any other means of communication directly or indirectlyto viewers and listeners.(C) “Customer” means a person who has a direct contractual relationship with a

broadcaster from whom the broadcaster derives gross receipts. “Customer” includes but isnot limited to an advertiser or licensee.(D) “Gross receipts from broadcasting” means gross receipts of a broadcaster from

transactions and activities in the regular course of its business, including but not limited toadvertising, licensing, and distribution, but excluding gross receipts from the sale of realproperty or tangible personal property.(f) Notwithstanding subparagraph division (c), income described in section 29C.24,

subsection 3, paragraph “a”, subparagraph (3), shall not be allocated and apportioned to thestate, as provided in section 29C.24.(g) Where income consists of more than one class of income as provided in subparagraph

divisions (a) through (e) of this subparagraph, it shall be reasonably apportioned by thebusiness activity ratio provided in rules adopted by the director.(h) The gross sales of the corporation within the state shall be taken to be the gross sales

from goods delivered or shipped to a purchaser within the state regardless of the F.O.B. pointor other conditions of the sale, excluding deliveries for transportation out of the state.b. For the purpose of this subsection:(1) “Manufacture” shall include the extraction and recovery of natural resources and all

processes of fabricating and curing.(2) “Sale” shall include exchange.(3) “Tangible personal property” shall be taken to mean corporeal personal property, such

as machinery, tools, implements, goods, wares, and merchandise, and shall not be takento mean money deposits in banks, shares of stock, bonds, notes, credits, or evidence of aninterest in property and evidences of debt.3. If any taxpayer believes that the method of allocation and apportionment hereinbefore

prescribed, as administered by the director and applied to the taxpayer’s business, hasoperated or will so operate as to subject the taxpayer to taxation on a greater portion ofthe taxpayer’s net income than is reasonably attributable to business or sources within thestate, the taxpayer shall be entitled to file with the director a statement of the taxpayer’sobjections and of such alternative method of allocation and apportionment as the taxpayerbelieves to be proper under the circumstances with such detail and proof and within suchtime as the director may reasonably prescribe; and if the director shall conclude that themethod of allocation and apportionment theretofore employed is in fact inapplicable andinequitable, the director shall redetermine the taxable income by such other method ofallocation and apportionment as seems best calculated to assign to the state for taxation theportion of the income reasonably attributable to business and sources within the state, notexceeding, however, the amount which would be arrived at by application of the statutoryrules for apportionment.







4. a. In addition to all taxes imposed under this division, there is imposed upon eachcorporation doing business within the state the greater of the tax determined in subsection 1,paragraphs “a” through “d” or the state alternative minimum tax equal to sixty percent of themaximum state corporate income tax rate for the tax year, rounded to the nearest one-tenthof one percent, of the state alternative minimum taxable income of the taxpayer computedunder this subsection.b. The state alternative minimum taxable income of a taxpayer is equal to the taxpayer’s

state taxable income as computed with the adjustments in section 422.35 and with thefollowing adjustments:(1) Add items of tax preference included in federal alternative minimum taxable income

under section 57, except subsections (a)(1) and (a)(5), of the Internal Revenue Code, makethe adjustments included in federal alternative minimum taxable income under section56, except subsections (a)(4) and (d), of the Internal Revenue Code, and add losses asrequired by section 58 of the Internal Revenue Code. In making the adjustment undersection 56(c)(1) of the Internal Revenue Code, interest and dividends from federal securitiesand interest and dividends from state and other political subdivisions and from regulatedinvestment companies exempt from federal income tax under the Internal Revenue Code,net of amortization of any discount or premium, shall be subtracted. For purposes of thissubparagraph, “Internal Revenue Code” means the Internal Revenue Code of 1954, prior tothe date of its redesignation as the Internal Revenue Code of 1986 by the Tax Reform Act of1986, or means the Internal Revenue Code of 1986 as amended and in effect on December21, 2017. This definition shall not be construed to include any amendment to the InternalRevenue Code enacted after the date specified in the preceding sentence, including anyamendment with retroactive applicability or effectiveness.(2) Apply the allocation and apportionment provisions of subsection 2.(3) Subtract an exemption amount of forty thousand dollars. This exemption amount shall

be reduced, but not below zero, by an amount equal to twenty-five percent of the amount bywhich the alternative minimum taxable income of the taxpayer, computed without regard tothe exemption amount in this subparagraph, exceeds one hundred fifty thousand dollars.(4) In the case of a net operating loss computed for a tax year beginning after December

31, 1986, which is carried back or carried forward to the current taxable year, the netoperating loss shall be reduced by the amount of items of tax preference and adjustmentsarising in the tax year which is taken into account in computing the net operating loss insection 422.35, subsection 11. The deduction for a net operating loss for a tax year beginningafter December 31, 1986, which is carried back or carried forward to the current taxableyear shall not exceed ninety percent of the alternative minimum taxable income determinedwithout regard for the net operating loss deduction.c. This subsection is repealed January 1, 2021, for tax years beginning on or after that

date.5. a. The taxes imposed under this division shall be reduced by a state tax credit for

increasing research activities in this state equal to the sum of the following:(1) Six and one-half percent of the excess of qualified research expenses during the tax

year over the base amount for the tax year based upon the state’s apportioned share of thequalifying expenditures for increasing research activities.(2) Six and one-half percent of the basic research payments determined under section

41(e)(1)(A) of the Internal Revenue Code during the tax year based upon the state’sapportioned share of the qualifying expenditures for increasing research activities.b. The state’s apportioned share of the qualifying expenditures for increasing research

activities is a percent equal to the ratio of qualified research expenditures in this state to thetotal qualified research expenditures.c. In lieu of the credit amount computed in paragraph “a”, subparagraph (1), a corporation

may elect to compute the credit amount for qualified research expenses incurred in this statein a manner consistent with the alternative simplified credit described in section 41(c)(5) ofthe Internal Revenue Code. The taxpayer may make this election regardless of the methodused for the taxpayer’s federal income tax. The election made under this paragraph is for thetax year and the taxpayer may use another or the same method for any subsequent year.











d. For purposes of the alternate credit computation method in paragraph “c”, the creditpercentages applicable to qualified research expenses described in section 41(c)(5)(A)and clause (ii) of section 41(c)(5)(B) of the Internal Revenue Code are four and fifty-fivehundredths percent and one and ninety-five hundredths percent, respectively.e. A corporation shall only be eligible for the credit provided in this subsection if the

business conducting the research meets all of the following requirements:(1) (a) The business is engaged in the manufacturing, life sciences, agriscience, software

engineering, or aviation and aerospace industry.(b) Persons that shall not be considered to be engaged in the manufacturing, life

sciences, agriscience, software engineering, or aviation and aerospace industry, and thus arenot eligible for the credit, include but are not limited to all of the following:(i) A person engaged in agricultural production as defined in section 423.1.(ii) A person who is a contractor, subcontractor, builder, or a contractor-retailer that

engages in commercial and residential repair and installation, including but not limitedto heating or cooling installation and repair, plumbing and pipe fitting, security systeminstallation, and electrical installation and repair. For purposes of this subparagraphsubdivision, “contractor-retailer” means a business that makes frequent retail sales to thepublic or to other contractors and that also engages in the performance of constructioncontracts.(iii) A finance or investment company.(iv) A retailer.(v) A wholesaler.(vi) A transportation company.(vii) A publisher.(viii) An agricultural cooperative association as defined in section 502.102.(ix) A real estate company.(x) A collection agency.(xi) An accountant.(xii) An architect.(2) The business claims and is allowed a research credit for such qualified research

expenses under section 41 of the Internal Revenue Code for the same taxable year as it isclaiming the credit provided in this subsection.f. (1) For purposes of this subsection, “base amount”means the product of the fixed-based

percentage times the average annual gross receipts of the taxpayer for the four taxable yearspreceding the taxable year for which the credit is being determined, but in no event shall thebase amount be less than fifty percent of the qualified research expenses for the credit year.(2) For purposes of this subsection, “basic research payment” and “qualified research

expense” mean the same as defined for the federal credit for increasing research activitiesunder section 41 of the Internal Revenue Code, except that for the alternative simplifiedcredit such amounts are for research conducted within this state.g. Any credit in excess of the tax liability for the taxable year shall be refunded with

interest in accordance with section 421.60, subsection 2, paragraph “e”. In lieu of claiming arefund, a taxpayer may elect to have the overpayment shown on its final, completed returncredited to the tax liability for the following taxable year.h. A corporation which is an eligible business may claim an additional research activities

credit authorized pursuant to section 15.335.i. The department shall by February 15 of each year issue an annual report to the general

assembly containing the total amount of all claims made by employers under this subsectionand the portion of the claims issued as refunds, for all claims processed during the previouscalendar year. The report shall contain the name of each claimant for whom a tax credit inexcess of five hundred thousand dollars was issued and the amount of the credit received.6. The taxes imposed under this division shall be reduced by a new jobs tax credit. An

industry which has entered into an agreement under chapter 260E and which has increasedits base employment level by at least ten percent within the time set in the agreement or, in thecase of an industry without a base employment level, adds new jobs within the time set in theagreement is entitled to this new jobs tax credit for the tax year selected by the industry. In














determining if the industry has increased its base employment level by ten percent or addednew jobs, only those new jobs directly resulting from the project covered by the agreementand those directly related to those new jobs shall be counted. The amount of this credit isequal to the product of six percent of the taxable wages upon which an employer is requiredto contribute to the state unemployment compensation fund, as defined in section 96.19,subsection 37, times the number of new jobs existing in the tax year that directly result fromthe project covered by the agreement or new jobs that directly result from those new jobs.The tax year chosen by the industry shall either begin or end during the period beginningwiththe date of the agreement and ending with the date by which the project is to be completedunder the agreement. Any credit in excess of the tax liability for the tax year may be creditedto the tax liability for the following ten tax years or until depleted in less than the ten years.For purposes of this section, “agreement”, “industry”, “new job” and “project”mean the sameas defined in section 260E.2 and “base employment level”means the number of full-time jobsan industry employs at the plant site which is covered by an agreement under chapter 260Eon the date of that agreement.7. a. (1) For tax years beginning before January 1, 2022, there is allowed as a credit

against the tax determined in subsection 1 for a tax year an amount equal to the minimumtax credit for that tax year.(2) The minimum tax credit for a tax year is the excess, if any, of the net minimum tax

imposed for all prior tax years beginning on or after January 1, 1987, but before January 1,2021, over the amount allowable as a credit under this subsection for those prior tax years.b. (1) The allowable credit under paragraph “a” for a tax year beginning before January

1, 2021, shall not exceed the excess, if any, of the tax determined in subsection 1 over thestate alternative minimum tax as determined in subsection 4. The allowable credit underparagraph “a” for a tax year beginning in the 2021 calendar year shall not exceed the taxdetermined in subsection 1.(2) The net minimum tax for a tax year is the excess, if any, of the tax determined in

subsection 4 for the tax year over the tax determined in subsection 1 for the tax year.c. This subsection is repealed January 1, 2022, for tax years beginning on or after that

date.8. The taxes imposed under this division shall be reduced by a franchise tax credit. A

taxpayer who is a shareholder in a financial institution, as defined in section 581 of theInternal Revenue Code, which has in effect for the tax year an election under subchapter Sof the Internal Revenue Code shall compute the amount of the tax credit by recomputingthe amount of tax under this division by reducing the taxable income of the taxpayer by thetaxpayer’s pro rata share of the items of income and expense of the financial institution.This recomputed tax shall be subtracted from the tax computed under this division and theresulting amount, which shall not exceed the taxpayer’s pro rata share of franchise tax paidby the financial institution, is the amount of the franchise tax credit allowed.9. a. The taxes imposed under this division shall be reduced by an assistive device tax

credit. A small business purchasing, renting, or modifying an assistive device or makingworkplace modifications for an individual with a disability who is employed or will beemployed by the small business is eligible, subject to availability of credits, to receive thisassistive device tax credit which is equal to fifty percent of the first five thousand dollarspaid during the tax year for the purchase, rental, or modification of the assistive deviceor for making the workplace modifications. Any credit in excess of the tax liability shallbe refunded with interest in accordance with section 421.60, subsection 2, paragraph “e”.In lieu of claiming a refund, a taxpayer may elect to have the overpayment shown on thetaxpayer’s final, completed return credited to the tax liability for the following tax year. Ifthe small business elects to take the assistive device tax credit, the small business shall notdeduct for Iowa tax purposes any amount of the cost of an assistive device or workplacemodifications which is deductible for federal income tax purposes.b. To receive the assistive device tax credit, the eligible small business must submit an

application to the economic development authority. If the taxpayer meets the criteria foreligibility, the economic development authority shall issue to the taxpayer a certificationof entitlement for the assistive device tax credit. However, the combined amount of tax





















credits that may be approved for a fiscal year under this subsection shall not exceed fivehundred thousand dollars. Tax credit certificates shall be issued on an earliest filed basis.The certification shall contain the taxpayer’s name, address, tax identification number, theamount of the credit, and tax year for which the certificate applies. The taxpayer must filethe tax credit certificate with the taxpayer’s corporate income tax return in order to claimthe tax credit. The economic development authority and department of revenue shall eachadopt rules to jointly administer this subsection and shall provide by rule for the method tobe used to determine for which fiscal year the tax credits are approved.c. For purposes of this subsection:(1) “Assistive device” means any item, piece of equipment, or product system which is

used to increase, maintain, or improve the functional capabilities of an individual with adisability in the workplace or on the job. “Assistive device” does not mean anymedical device,surgical device, or organ implanted or transplanted into or attached directly to an individual.“Assistive device” does not include any device for which a certificate of title is issued by thestate department of transportation, but does include any item, piece of equipment, or productsystem otherwise meeting the definition of “assistive device” that is incorporated, attached,or included as a modification in or to such a device issued a certificate of title.(2) “Disability”means the same as defined in section 15.102, except that it does not include

alcoholism.(3) “Small business”means a business that either had gross receipts for its preceding tax

year of three million dollars or less or employed not more than fourteen full-time employeesduring its preceding tax year.(4) “Workplace modifications” means physical alterations to the work environment.10. The taxes imposed under this division shall be reduced by a historic preservation tax

credit allowed under chapter 404A.11. Reserved.11A. The taxes imposed under this division shall be reduced by an ethanol promotion

tax credit for each tax year that the taxpayer is eligible to claim the tax credit under thissubsection.a. The taxpayer shall claim the tax credit in the same manner as provided in section

422.11N. The taxpayer may claim the tax credit according to the same requirements, for thesame amount, and calculated in the same manner, as provided for the ethanol promotion taxcredit pursuant to section 422.11N.b. Any ethanol promotion tax credit which is in excess of the taxpayer’s tax liability shall

be refunded or may be shown on the taxpayer’s final, completed return credited to the taxliability for the following tax year in the same manner as provided in section 422.11N.c. This subsection is repealed on January 1, 2021.11B. The taxes imposed under this division shall be reduced by an E-85 gasoline

promotion tax credit for each tax year that the taxpayer is eligible to claim the tax creditunder this subsection.a. The taxpayer shall claim the tax credit in the same manner as provided in section

422.11O. The taxpayer may claim the tax credit according to the same requirements, for thesame amount, and calculated in the samemanner, as provided for the E-85 gasoline promotiontax credit pursuant to section 422.11O.b. Any E-85 gasoline promotion tax credit which is in excess of the taxpayer’s tax liability

shall be refunded or may be shown on the taxpayer’s final, completed return credited to thetax liability for the following tax year in the same manner as provided in section 422.11O.c. This subsection is repealed on January 1, 2025.11C. The taxes imposed under this division shall be reduced by a biodiesel blended fuel

tax credit for each tax year that the taxpayer is eligible to claim the tax credit under thissubsection.a. The taxpayer may claim the biodiesel blended fuel tax credit according to the same

requirements, for the same amount, and calculated in the same manner, as provided for thebiodiesel blended fuel tax credit pursuant to section 422.11P.b. Any biodiesel blended fuel tax credit which is in excess of the taxpayer’s tax liability




























shall be refunded or may be shown on the taxpayer’s final, completed return credited to thetax liability for the following tax year in the same manner as provided in section 422.11P.c. This subsection is repealed on January 1, 2025.11D. The taxes imposed under this division shall be reduced by an E-15 plus gasoline

promotion tax credit for each tax year that the taxpayer is eligible to claim the tax creditunder this subsection.a. The taxpayer shall claim the tax credit in the same manner as provided in section

422.11Y. The taxpayer may claim the tax credit according to the same requirements, forthe same amount, and calculated in the same manner, as provided for the E-15 plus gasolinepromotion tax credit pursuant to section 422.11Y.b. Any E-15 plus gasoline promotion tax credit which is in excess of the taxpayer’s

tax liability shall be refunded or may be shown on the taxpayer’s final, completed returncredited to the tax liability for the following tax year in the same manner as provided insection 422.11Y.c. This subsection is repealed on January 1, 2025.12. a. The taxes imposed under this division shall be reduced by an investment tax credit

authorized pursuant to section 15E.43 for an investment in a qualifying business.b. The taxes imposed under this division shall be reduced by investment tax credits

authorized pursuant to section 15.333 and section 15E.193B, subsection 6, Code 2014.13. The taxes imposed under this division shall be reduced by an innovation fund

investment tax credit allowed under section 15E.52.14. The taxes imposed under this division shall be reduced by an endow Iowa tax credit

authorized pursuant to section 15E.305.15. The taxes imposed under this division shall be reduced by a workforce housing

investment tax credit allowed under section 15.355, subsection 3.16. The taxes imposed under this division shall be reduced by tax credits for wind energy

production allowed under chapter 476B and for renewable energy allowed under chapter476C.17. Reserved.18. Reserved.19. The taxes imposed under this division shall be reduced by a corporate tax credit

authorized pursuant to section 15.331C for certain sales taxes paid by a third-party developer.20. The taxes imposed under this division shall be reduced by a tax credit authorized

pursuant to section 15E.66, if redeemed, for investments in the Iowa fund of funds.21. The taxes imposed under this division shall be reduced by a beginning farmer tax

credit as allowed under chapter 16, subchapter VIII, part 5, subpart B.22. The taxes imposed under this division shall be reduced by a renewable chemical

production tax credit allowed under section 15.319. This subsection is repealed January 1,2033.23. Reserved.24. Reserved.25. a. The taxes imposed under this division shall be reduced by a charitable conservation

contribution tax credit equal to fifty percent of the fair market value of a qualified realproperty interest located in the state that is conveyed as an unconditional charitable donationin perpetuity by the taxpayer to a qualified organization exclusively for conservationpurposes. The maximum amount of tax credit is one hundred thousand dollars. The amountof the contribution for which the tax credit is claimed shall not be deductible in determiningtaxable income for state tax purposes.b. For purposes of this section, “conservation purpose”, “qualified organization”, and

“qualified real property interest” mean the same as defined for the qualified conservationcontribution under section 170(h) of the Internal Revenue Code, except that a conveyance ofland for open space for the purpose of fulfilling density requirements to obtain subdivisionor building permits shall not be considered a conveyance for a conservation purpose.c. Any credit in excess of the tax liability is not refundable but the excess for the tax

year may be credited to the tax liability for the following twenty tax years or until depleted,whichever is the earlier.


































26. The taxes imposed under this division shall be reduced by a redevelopment tax creditallowed under chapter 15, subchapter II, part 9.27. Reserved.28. The taxes imposed under this division shall be reduced by a school tuition organization

tax credit allowed under section 422.11S. The maximum amount of tax credits that may beapproved under this subsection for a tax year equals twenty-five percent of the school tuitionorganization’s tax credits that may be approved pursuant to section 422.11S, subsection 8,for a tax year.29. a. The taxes imposed under this division shall be reduced by a solar energy system

tax credit equal to sixty percent of the federal energy credit related to solar energy systemsprovided in section 48(a)(2)(A)(i)(II) and section 48(a)(2)(A)(i)(III) of the Internal RevenueCode, not to exceed twenty thousand dollars. For installations occurring on or after January1, 2016, the applicable percentage of the federal energy credit related to solar energy systemsshall be fifty percent.b. The taxpayer may claim the credit pursuant to this subsection according to the same

requirements, conditions, and limitations as provided pursuant to section 422.11L.30. The taxes imposed under this division shall be reduced by a from farm to food donation

tax credit as allowed under chapter 190B.[C35, §6943-f29; C39, §6943.065; C46, 50, 54, 58, 62, 66, 71, 73, 75, 77, 79, 81, §422.33; 81

Acts, ch 135, §1 – 3; 82 Acts, ch 1023, §12, 13, 30, 31, ch 1234, §1]83 Acts, ch 179, §14, 15, 22, 25; 83 Acts, ch 207, §90, 93; 85 Acts, ch 32, §81; 85 Acts, ch 230,

§7; 86 Acts, ch 1007, §28; 86 Acts, ch 1194, §1; 86 Acts, ch 1236, §8; 86 Acts, ch 1241, §22; 87Acts, ch 22, §11; 87 Acts, 1st Ex, ch 1, §6, 7; 88 Acts, ch 1028, §33; 88 Acts, ch 1099, §1; 89Acts, ch 251, §20 – 22; 89 Acts, ch 285, §5; 90 Acts, ch 1171, §5; 90 Acts, ch 1196, §2; 91 Acts,ch 215, §5; 92 Acts, ch 1200, §1, 4; 93 Acts, ch 113, §3; 94 Acts, ch 1165, §19; 94 Acts, ch 1166,§8, 11; 95 Acts, ch 83, §4, 35; 95 Acts, ch 152, §5, 7; 97 Acts, ch 135, §7, 9; 98 Acts, ch 1078, §7,10; 99 Acts, ch 95, §8, 9, 12, 13; 99 Acts, ch 151, §10, 11, 89; 2000 Acts, ch 1146, §8, 9, 11; 2000Acts, ch 1194, §12 – 14, 21; 2001 Acts, ch 123, §3, 6; 2001 Acts, ch 127, §8 – 10; 2002 Acts, ch1006, §8, 13; 2002 Acts, ch 1069, §9, 10, 14; 2002 Acts, ch 1156, §3, 8; 2003 Acts, ch 139, §9, 11,12; 2003 Acts, ch 145, §286; 2003 Acts, 1st Ex, ch 1, §113, 133; 2003 Acts, 1st Ex, ch 2, §85, 89[2003 Acts, 1st Ex, ch 1, §113, 133 amendment adding new subsection 15 stricken pursuant

to Rants v. Vilsack, 684 N.W.2d 193]2004 Acts, ch 1073, §18; 2004 Acts, ch 1175, §405, 418; 2005 Acts, ch 24, §8, 10, 11; 2005

Acts, ch 146, §2, 3; 2005 Acts, ch 150, §14, 62, 69; 2005 Acts, ch 160, §2, 14; 2006 Acts, ch1136, §2; 2006 Acts, ch 1140, §7, 10, 11; 2006 Acts, ch 1142, §42 – 49; 2006 Acts, ch 1158, §29– 33; 2006 Acts, ch 1159, §26; 2006 Acts, ch 1161, §4, 7; 2006 Acts, ch 1175, §16, 17, 23; 2007Acts, ch 12, §6 – 8; 2007 Acts, ch 162, §7, 13; 2007 Acts, ch 165, §5, 9; 2008 Acts, ch 1004, §2,7; 2008 Acts, ch 1011, §7, 9; 2008 Acts, ch 1169, §33 – 35; 2008 Acts, ch 1173, §9; 2008 Acts,ch 1191, §63, 107, 137, 163, 168; 2009 Acts, ch 41, §125; 2009 Acts, ch 100, §34, 35; 2009 Acts,ch 177, §44; 2009 Acts, ch 179, §133, 153, 234; 2010 Acts, ch 1061, §84, 182; 2010 Acts, ch1138, §12, 16, 22, 26; 2011 Acts, ch 34, §98; 2011 Acts, ch 41, §13, 14, 16; 2011 Acts, ch 113,§19, 22, 23, 29, 33, 34, 36, 39, 40; 2011 Acts, ch 118, §85, 89; 2011 Acts, ch 130, §42, 47; 2012Acts, ch 1007, §6 – 8; 2012 Acts, ch 1110, §10, 11; 2012 Acts, ch 1121, §8, 10, 11; 2012 Acts,ch 1136, §34, 39 – 41; 2013 Acts, ch 1, §6 – 8; 2013 Acts, ch 30, §89; 2013 Acts, ch 125, §21,23, 24; 2013 Acts, ch 140, §146, 147; 2014 Acts, ch 1026, §87; 2014 Acts, ch 1076, §5 – 7; 2014Acts, ch 1080, §87, 88, 98, 119, 125; 2014 Acts, ch 1092, §90; 2014 Acts, ch 1118, §9, 12; 2014Acts, ch 1130, §20, 24 – 26, 38; 2014 Acts, ch 1141, §21, 76, 79, 80; 2015 Acts, ch 1, §6 – 8; 2015Acts, ch 30, §118; 2015 Acts, ch 86, §1 – 3; 2015 Acts, ch 124, §3, 9; 2015 Acts, ch 138, §121,126, 127; 2016 Acts, ch 1065, §13, 15, 16; 2016 Acts, ch 1095, §6, 14, 15; 2016 Acts, ch 1106,§2, 5, 9; 2017 Acts, ch 29, §121, 166; 2017 Acts, ch 157, §9, 10, 12, 14; 2018 Acts, ch 1161, §8,9, 15, 16, 37 – 39, 43, 45, 88 – 93, 97, 98; 2019 Acts, ch 59, §123; 2019 Acts, ch 152, §59, 60;2019 Acts, ch 161, §14, 18, 19Referred to in §2.48, 15.119, 15.335, 16.82, 29C.24, 422.8, 422.21, 422.34A, 422.35, 422.36, 422.37, 422.85, 441.21, 476C.2Internal Revenue Code definition is updated regularly; for applicable definition in a prior tax year, refer to Iowa Acts and Code for that

yearFor provisions relating to requirements for claiming an ethanol promotion tax credit under subsection 11A in calendar year 2020 for a

retail dealer whose tax year ends prior to December 31, 2020, see 2006 Acts, ch 1142, §49; 2006 Acts, ch 1175, §17; 2011 Acts, ch 113, §11,13, 14



































































































































































79 INDIVIDUAL INCOME, CORPORATE, AND FRANCHISE TAXES, §422.34A

For provisions relating to requirements for claiming an E-85 gasoline promotion tax credit under subsection 11B in calendar year 2024for a retail dealer whose tax year ends prior to December 31, 2024, see 2006 Acts, ch 1142, §49; 2011 Acts, ch 113, §20, 22, 23; 2016 Acts,ch 1106, §6For provisions relating to requirements for claiming a biodiesel blended fuel tax credit under subsection 11C in calendar year 2024 for

a retail dealer whose tax year ends prior to December 31, 2024, see 2006 Acts, ch 1142, §49; 2011 Acts, ch 113, §31, 33, 34; 2016 Acts, ch1106, §10For provisions relating to requirements for claiming an E-15 plus gasoline promotion tax credit under subsection 11D in calendar year

2024 for a retail dealer whose tax year ends prior to December 31, 2024, see 2011 Acts, ch 113, §37, 39, 40; 2016 Acts, ch 1106, §32015 amendments to subsection 2, paragraph a, apply retroactively to January 1, 2015, for tax years beginning on or after that date;

2015 Acts, ch 86, §32015 amendment to subsection 12, paragraph a, takes effect July 2, 2015, and applies to equity investments in a qualifying business

made on or after that date; 2015 Acts, ch 138, §126, 127Subsection 2, paragraph a, subparagraph (2), subparagraph division (f), takes effect April 21, 2016, and applies retroactively to January

1, 2016, for tax years beginning on or after that date; 2016 Acts, ch 1095, §14, 15Subsection 22 takes effect April 6, 2016, and applies to renewable chemicals produced in the state from biomass feedstock on or after

January 1, 2017; 2016 Acts, ch 1065, §15, 16For restrictions on the issuance and claiming of renewable chemical production tax credits under §15.319, see 2016 Acts, ch 1065, §14For provisions relating to the definition of Internal Revenue Code for the period beginning January 1, 2015, and ending December 31,

2015, and for tax years beginning during the 2015 calendar year, see 2016 Acts, ch 1007, §1, 4, 52018 amendment to subsection 1, paragraphs a, b, c, and d, takes effect January 1, 2019, and applies to tax years beginning on or after

that date; 2018 Acts, ch 1161, §97, 982018 amendment to subsection 4, paragraph a, takes effect January 1, 2019, and applies to tax years beginning on or after that date;

2018 Acts, ch 1161, §97, 982018 amendment to subsection 4, paragraph b, subparagraph (1), takes effect January 1, 2019, and applies to tax years beginning on or

after that date; 2018 Acts, ch 1161, §97, 98Subsection 4, paragraph c, takes effect January 1, 2019, and applies to tax years beginning on or after that date; 2018 Acts, ch 1161, §97,

98Subsection 5, paragraph e, applies retroactively to January 1, 2017, for tax years beginning on or after that date; 2018 Acts, ch 1161, §452018 strike of subsection 5, former paragraph e, subparagraph (2), takes effect on January 1, 2019, and applies to tax years beginning

on or after that date; 2018 Acts, ch 1161, §97, 982018 amendment to subsection 5, paragraph g, applies retroactively to January 1, 2018, for tax years beginning, and for refunds issued,

on or after that date; 2018 Acts, ch 1161, §16Legislative intent regarding enactment of subsection 5, NEW paragraph f, subparagraph (1), and amendment of subsection 5, paragraph

f, former subparagraph (1); 2018 Acts, ch 1161, §412018 amendment to subsection 7 takes effect January 1, 2019, and applies to tax years beginning on or after that date; 2018 Acts, ch

1161, §97, 982018 amendment to subsection 9, paragraph a, applies retroactively to January 1, 2018, for tax years beginning, and for refunds issued,

on or after that date; 2018 Acts, ch 1161, §162019 amendment to subsection 21 applies retroactively to January 1, 2019, for tax years beginning on or after that date; for provisions

relating to tax credit applications under prior law, approved prior to May 21, 2019, and the carryforward period for those tax credits; see2019 Acts, ch 161, §16, 17, 19Subsection 5, paragraph e, subparagraph (1), subparagraph division (a) amendedSubsection 5, paragraph e, subparagraph (1), subparagraph division (b), unnumbered paragraph 1 amendedSubsection 5, paragraph f, subparagraph (1) amendedSubsection 21 amended

422.34 Exempted corporations and organizations.The following organizations and corporations shall be exempt from taxation under this

division:1. All state, national, private, cooperative, and savings banks, credit unions, title insurance

and trust companies, federally chartered savings and loan associations, production creditassociations, insurance companies or insurance associations, reciprocal or inter-insuranceexchanges, and fraternal beneficiary associations.2. a. An organization described in section 501 of the Internal Revenue Code unless the

exemption is denied under section 501, 502, 503, or 504 of the Internal Revenue Code.b. An organization that would have qualified as an organization exempt from federal

income tax under section 501(c)(19) of the Internal Revenue Code but for the fact that therequirement that substantially all of the members who are not past or present members ofthe United States armed forces is not met because such members include ancestors or linealdescendants, shall be considered for purposes of the exemption from taxation under thisdivision as an organization exempt from federal income tax under section 501(c)(19) of theInternal Revenue Code.[C35, §6943-f30; C39, §6943.066; C46, 50, 54, 58, 62, 66, 71, 73, 75, 77, 79, 81, §422.34]92 Acts, 2nd Ex, ch 1001, §239, 251; 94 Acts, ch 1165, §20; 2003 Acts, ch 142, §9; 2010 Acts,

ch 1061, §56; 2012 Acts, ch 1017, §82Referred to in §422.33, 422.37

422.34A Exempt activities of foreign corporations.A foreign corporation shall not be considered doing business in this state or deriving income

from sources within this state for the purposes of this division by reason of carrying on in thisstate one or more of the following activities:









































§422.34A, INDIVIDUAL INCOME, CORPORATE, AND FRANCHISE TAXES 80

1. Holding meetings of the board of directors or shareholders or holiday parties oremployee appreciation dinners.2. Maintaining bank accounts.3. Borrowing money, with or without security.4. Utilizing Iowa courts for litigation.5. Owning and controlling a subsidiary corporation which is incorporated in or which is

transacting business within this state where the holding or parent company has no physicalpresence in the state as that presence relates to the ownership or control of the subsidiary.6. Recruiting personnel where hiring occurs outside the state.7. Training employees or educating employees, or using facilities in Iowa for this purpose.8. Utilizing a distribution facility within this state, owning or leasing property at a

distribution facility within this state that is used at or distributed from the distributionfacility, or selling property shipped or distributed from a distribution facility. For purposes ofthis subsection, “distribution facility” means an establishment where shipments of tangiblepersonal property are processed for delivery to customers. “Distribution facility” does notinclude an establishment where retail sales of tangible personal property or returns of suchproperty are undertaken with respect to retail customers on more than twelve days a yearexcept for a distribution facility which processes customer sales orders by mail, telephone,or electronic means, if the distribution facility also processes shipments of tangible personalproperty to customers provided that not more than ten percent of the dollar amount ofgoods are delivered and shipped so as to be included in the gross sales of the corporationwithin this state as provided in section 422.33, subsection 2, paragraph “a”, subparagraph(2), subparagraph division (h).96 Acts, ch 1123, §1, 2; 97 Acts, ch 46, §1, 2; 2006 Acts, ch 1179, §58, 66; 2014 Acts, ch 1026,

§140

422.35 Net income of corporation — how computed.The term “net income” means the taxable income before the net operating loss deduction,

as properly computed for federal income tax purposes under the Internal Revenue Code, withthe following adjustments:1. Subtract interest and dividends from federal securities.2. Add interest and dividends from foreign securities, from securities of state and other

political subdivisions, and from regulated investment companies exempt from federal incometax under the Internal Revenue Code, except for those securities the interest and dividendsfrom which are exempt from taxation by the state of Iowa as otherwise provided by law,including those set forth in section 422.7, subsection 2.3. Where the net income includes capital gains or losses, or gains or losses from

property other than capital assets, and such gains or losses have been determined by usinga basis established prior to January 1, 1934, an adjustment may be made, under rules andregulations prescribed by the director, to reflect the difference resulting from the use of abasis of cost or January 1, 1934, fair market value, less depreciation allowed or allowable,whichever is higher. Provided that the basis shall be fair market value as of January 1, 1955,less depreciation allowed or allowable, in the case of property acquired prior to that date ifuse of a prior basis is declared to be invalid.4. a. For tax years beginning before January 1, 2022, subtract fifty percent of the federal

income taxes paid during the tax year to the extent payment is for a tax year beginning priorto January 1, 2021, adjusted by any federal income tax refunds to the extent the tax wasdeducted for a tax year beginning prior to January 1, 2021.b. Add the Iowa income tax deducted in computing federal taxable income.5. Subtract the amount of the work opportunity tax credit allowable for the tax year under

section 51 of the Internal Revenue Code to the extent that the credit increased federal taxableincome.6. a. If the taxpayer is a small business corporation, subtract an amount equal to

sixty-five percent of the wages paid to individuals, but not to exceed twenty thousand dollarsper individual, named in subparagraphs (1), (2), and (3) who were hired for the first time bythe taxpayer during the tax year for work done in this state:











(1) An individual with a disability domiciled in this state at the time of the hiring whomeets any of the following conditions:(a) Has a physical or mental impairment which substantially limits one or more major life

activities.(b) Has a record of that impairment.(c) Is regarded as having that impairment.(2) An individual domiciled in this state at the time of the hiring who meets any of the



parole or probation and to whom the interstate probation and parole compact under section907A.1, Code 2001, applies, or to whom the interstate compact for adult offender supervisionunder chapter 907B applies.b. This deduction is allowed for the wages paid to the individuals successfully completing

a probationary period named in paragraph “a”, subparagraphs (1), (2), and (3) during thetwelve months following the date of first employment by the taxpayer and shall be deductedin the tax years when paid.c. For purposes of this subsection:(1) “Physical or mental impairment” means any physiological disorder or condition,

cosmetic disfigurement, or anatomical loss affecting one or more of the body systems or anymental or psychological disorder, including intellectual disability, organic brain syndrome,emotional or mental illness, and specific learning disabilities.(2) (a) “Small business”means a profit or nonprofit business, including but not limited to

an individual, partnership, corporation, joint venture, association, or cooperative, to whichthe following apply:(i) It is not an affiliate or subsidiary of a business dominant in its field of operation.(ii) It has either twenty or fewer full-time equivalent positions or not more than the

equivalent of three million dollars in annual gross revenues as computed for the precedingfiscal year or as the average of the three preceding fiscal years.(iii) It does not include the practice of a profession.(b) “Small business” includes an employee-owned business which has been an

employee-owned business for less than three years or which meets the conditions ofsubparagraph division (a), subparagraph subdivisions (i) through (iii).(c) For purposes of this definition, “dominant in its field of operation”means having more

than twenty full-time equivalent positions andmore than three million dollars in annual grossrevenues, and “affiliate or subsidiary of a business dominant in its field of operation” meansa business which is at least twenty percent owned by a business dominant in its field ofoperation, or by partners, officers, directors, majority stockholders, or their equivalents, of abusiness dominant in that field of operation.6A. a. If the taxpayer is a business corporation and does not qualify for the adjustment

under subsection 6, subtract an amount equal to sixty-five percent of the wages paidto individuals, but shall not exceed twenty thousand dollars per individual, named insubparagraphs (1) and (2) who were hired for the first time by the taxpayer during the taxyear for work done in this state:(1) An individual domiciled in this state at the time of the hiring who meets any of the
















parole or probation and to whom the interstate probation and parole compact under section907A.1, Code 2001, applies, or to whom the interstate compact for adult offender supervisionunder chapter 907B applies.b. This deduction is allowed for the wages paid to the individuals successfully completing

a probationary period named in paragraph “a”, subparagraphs (1) and (2) during the twelvemonths following the date of first employment by the taxpayer and shall be deducted in thetax years when paid.c. The department shall develop and distribute information concerning the deduction

available for businesses employing persons named in paragraph “a”, subparagraphs (1) and(2).7. Subtract the amount of the alcohol and cellulosic biofuel fuels credit allowable for the

tax year under section 40 of the Internal Revenue Code to the extent that the credit increasedfederal taxable income.8. Add the amounts deducted and subtract the amounts included in income as a result

of the treatment provided sale-leaseback agreements under section 168(f)(8) of the InternalRevenue Code for property placed in service by the transferee prior to January 1, 1986, tothe extent that the amounts deducted and the amounts included in income are not otherwisedeductible or included in income under the other provisions of the Internal Revenue Code asamended to and including December 31, 1985. Entitlement to depreciation on any propertyinvolved in a sale-leaseback agreement which is placed in service by the transferee prior toJanuary 1, 1986, shall be determined under the Internal Revenue Code as amended to andincluding December 31, 1985, excluding section 168(f)(8) in making the determination.9. Reserved.10. Add the percentage depletion amount determined with respect to an oil, gas, or

geothermal well using methods in section 613 of the Internal Revenue Code that is in excessof the cost depletion amount determined under section 611 of the Internal Revenue Code.11. If after applying all of the adjustments provided for in this section and the allocation

and apportionment provisions of section 422.33, the Iowa taxable income results in a netoperating loss, such net operating loss shall be deducted as follows:a. For tax years beginning prior to January 1, 2009, the Iowa net operating loss shall be

carried back three taxable years for a net operating loss incurred in a presidentially declareddisaster area by a taxpayer engaged in a small business or in the trade or business of farming.For all other Iowa net operating losses for tax years beginning prior to January 1, 2009, thenet operating loss shall be carried back two taxable years or to the taxable year in which thecorporation first commenced doing business in this state, whichever is later.b. An Iowa net operating loss for a tax year beginning on or after January 1, 2009, or an

Iowa net operating loss remaining after being carried back as required in paragraph “a” or“f” shall be carried forward twenty taxable years.c. If the election under section 172(b)(3) of the Internal Revenue Code is made, the Iowa

net operating loss shall be carried forward twenty taxable years.d. No portion of a net operating loss which was sustained from that portion of the trade

or business carried on outside the state of Iowa shall be deducted.e. The limitations on net operating loss carryback and carryforward under sections

172(b)(1)(E) and 172(h) of the Internal Revenue Code shall apply.f. Notwithstanding paragraph “a”, for a taxpayer who is engaged in the trade or business

of farming as defined in section 263A(e)(4) of the Internal Revenue Code and has a lossfrom farming as defined in section 172(b)(1)(F) of the Internal Revenue Code includingmodifications prescribed by rule by the director, the Iowa loss from the trade or business offarming, for tax years beginning prior to January 1, 2009, is a net operating loss which maybe carried back five taxable years prior to the taxable year of the loss.g. The deductions described in paragraphs “a” through “f” of this subsection are allowed

subject to the requirement that a corporation affected by the allocation provisions of section422.33 shall be permitted to deduct only that portion of the deductions for net operating lossand federal income taxes that is fairly and equitably allocable to Iowa, under rules prescribedby the director.12. Subtract the loss on the sale or exchange of a share of a regulated investment company











held for six months or less to the extent the loss was disallowed under section 852(b)(4)(B)of the Internal Revenue Code.13. Add, to the extent it reduced federal taxable income, any amount contributed under

section 170 of the Internal Revenue Code to the extent such contribution was made to anorganization for the purpose of deposit in the Iowa education savings plan trust establishedin chapter 12D, and the taxpayer designated that any part of the contribution be used forthe direct benefit of any dependent of a shareholder of the taxpayer or any other singlebeneficiary designated by the taxpayer.14. a. Notwithstanding any other provision of the law to the contrary, the increased

expensing allowance under section 179 of the Internal Revenue Code, as amended by Pub.L. No. 115-97, §13101, applies in computing net income for state tax purposes for tax yearsbeginning on or after January 1, 2018, subject to the limitations in this subsection for taxyears beginning prior to January 1, 2020.b. If the taxpayer has taken the increased expensing allowance under section 179 of the

Internal Revenue Code, as amended by Pub. L. No. 115-97, §13101, for purposes of computingfederal taxable income for tax years beginning on or after January 1, 2018, but before January1, 2020, then the taxpayer shall make the following adjustments to federal taxable incomewhen computing net income for state tax purposes for the same tax year:(1) Add the total amount of expense deduction taken on section 179 property allowable

for federal tax purposes under section 179 of the Internal Revenue Code, as amended by Pub.L. No. 115-97, §13101.(2) (a) For tax years beginning on or after January 1, 2018, but before January 1, 2019,

subtract the amount of expense deduction on section 179 property allowable for federal taxpurposes under section 179 of the Internal Revenue Code, as amended by Pub. L. No. 115-97,§13101, not to exceed seventy thousand dollars. The subtraction in this subparagraph divisionshall be reduced, but not below zero, by the amount by which the total cost of section 179property placed in service by the taxpayer during the tax year exceeds two hundred eightythousand dollars.(b) For the tax years beginning on or after January 1, 2019, but before January 1, 2020,

subtract the amount of expense deduction on section 179 property allowable for federal taxpurposes under section 179 of the Internal Revenue Code, as amended by Pub. L. No. 115-97,§13101, not to exceed one hundred thousand dollars. The subtraction in this subparagraphshall be reduced, but not below zero, by the amount by which the total cost of section 179property placed in service by the taxpayer during the tax year exceeds four hundred thousanddollars.(3) Any other adjustments to gains or losses necessary to reflect adjustments made in

subparagraphs (1) and (2).c. The director shall adopt rules pursuant to chapter 17A to administer this subsection.15. a. For tax years beginning on or after January 1, 2018, but before January 1, 2020, a

taxpayer may elect to take advantage of this subsection in lieu of subsection 14, but only if thetaxpayer’s total expensing allowance deduction for federal tax purposes under section 179 ofthe Internal Revenue Code, as amended by Pub. L. No. 115-97, §13101, that is allocated to thetaxpayer from one or more partnerships or limited liability companies electing to have theincome taxed directly to the owners exceeds seventy thousand dollars for a tax year beginningduring the 2018 calendar year, or exceeds one hundred thousand dollars for the tax yearbeginning during the 2019 calendar year, and would, except as provided in this subsection, belimited for purposes of computing net income for state tax purposes pursuant to subsection14.b. A taxpayer who elects to take advantage of this subsection shall make the following

adjustments to federal taxable income when computing net income for state tax purposes:(1) Add the total amount of section 179 expense deduction allocated to the taxpayer from

all partnerships or limited liability companies electing to have the income taxed directly tothe owners, to the extent the allocated amount was allowed as a deduction to the taxpayerfor federal tax purposes for the tax year under section 179 of the Internal Revenue Code, asamended by Pub. L. No. 115-97, §13101.(2) From the amount added in subparagraph (1), do the following:













(a) For tax years beginning on or after January 1, 2018, but before January 1, 2019,subtract the first seventy thousand dollars of expensing allowance deduction on section 179property.(b) For tax years beginning on or after January 1, 2019, but before January 1, 2020,

subtract the first one hundred thousand dollars of expensing allowance deduction on section179 property.(3) The remaining amount, equal to the difference between the amount added in

subparagraph (1), and the amount subtracted in subparagraph (2), may be deducted by thetaxpayer but such deduction shall be amortized equally over five tax years beginning in thefollowing tax year.(4) Any other adjustments to gains or losses necessary to reflect adjustments made in

subparagraphs (1) through (3).c. A taxpayer who elects to take advantage of this subsection shall not take the increased

expensing allowance under section 179 of the Internal Revenue Code, as amended byPub. L. No. 115-97, §13101, for any section 179 property placed in service by the taxpayerin computing taxable income for state tax purposes. If the taxpayer has taken any suchdeduction for purposes of computing federal taxable income, the taxpayer shall make thefollowing adjustments to federal taxable income when computing net income for state taxpurposes:(1) Add the total amount of expense deduction for federal tax purposes taken on section

179 property placed in service by the taxpayer under section 179 of the Internal RevenueCode, as amended by Pub. L. No. 115-97, §13101.(2) Subtract the amount of depreciation allowable on such property under the modified

accelerated cost recovery system described in section 168 of the Internal Revenue Code,without regard to section 168(k) of the Internal Revenue Code. The taxpayer shall continueto take depreciation on the applicable property in future tax years to the extent allowedunder the modified accelerated cost recovery system described in section 168 of the InternalRevenue Code, without regard to section 168(k) of the Internal Revenue Code.(3) Any other adjustments to gains or losses necessary to reflect the adjustments made in

subparagraphs (1) and (2).d. The election made under this subsection is for one tax year and the taxpayer may elect

or not elect to take advantage of this subsection in any subsequent tax year. However, notelecting to take advantage of this subsection in a subsequent tax year shall not affect thetaxpayer’s ability to claim the tax deduction under paragraph “b”, subparagraph (3), thatoriginated from a previous tax year.e. The director shall adopt rules pursuant to chapter 17A to administer this subsection.16. Add depreciation taken for federal income tax purposes on a speculative shell

building defined in section 427.1, subsection 27, which is owned by a for-profit entity andthe for-profit entity is receiving the proper tax exemption. Subtract depreciation computedas if the speculative shell building were classified as fifteen-year property during the periodduring which it is owned by the taxpayer and is receiving the property tax exemption.However, this subsection does not apply to a speculative shell building which is used by thetaxpayer, subsidiary of the taxpayer, or majority owners of the taxpayer, for other than as aspeculative shell building, as defined in section 427.1, subsection 27.17. Subtract the amount of the employer social security credit allowable for the tax year

under section 45B of the Internal Revenue Code to the extent that the credit increases federaltaxable income.18. Add, to the extent not already included, income from the sale of obligations of the

state and its political subdivisions. Income from the sale of these obligations is exempt fromthe taxes imposed by this division only if the law authorizing these obligations specificallyexempts the income from the sale from the state corporate income tax.19. a. The additional first-year depreciation allowance authorized in section 168(k) of the

Internal Revenue Code, as enacted by Pub. L. No. 107-147, §101, does not apply in computingnet income for state tax purposes. If the taxpayer has taken such deduction in computingtaxable income, the following adjustments shall be made:













(1) Add the total amount of depreciation taken on all property for which the election undersection 168(k) of the Internal Revenue Code was made for the tax year.(2) Subtract an amount equal to depreciation allowed on such property for the tax year

using the modified accelerated cost recovery system depreciation method applicable undersection 168 of the Internal Revenue Code without regard to section 168(k).(3) Any other adjustments to gains or losses to reflect the adjustments made in

subparagraphs (1) and (2) pursuant to rules adopted by the director.b. A taxpayer may elect to apply the additional first-year depreciation allowance

authorized in section 168(k)(4) of the Internal Revenue Code, as enacted by Pub. L. No.108-27, in computing net income for state tax purposes, for qualified property acquiredafter May 5, 2003, and before January 1, 2005. If the taxpayer elects to take the additionalfirst-year depreciation allowance authorized in section 168(k)(4) of the Internal RevenueCode for state tax purposes, the deduction may be taken on amended state tax returns,if necessary. If the taxpayer does not elect to take the additional first-year depreciationallowance authorized in section 168(k)(4) of the Internal Revenue Code for state taxpurposes, the following adjustment shall be made:(1) Add the total amount of depreciation taken on all property for which the election under

section 168(k)(4) of the Internal Revenue Code was made for the tax year.(2) Subtract an amount equal to depreciation allowed on such property for the tax year

using the modified accelerated cost recovery system depreciation method applicable undersection 168 of the Internal Revenue Code without regard to section 168(k)(4).(3) Any other adjustments to gains or losses to reflect the adjustments made in

subparagraphs (1) and (2) pursuant to rules adopted by the director.19A. The additional first-year depreciation allowance authorized in section 168(k) of the

Internal Revenue Code does not apply in computing net income for state tax purposes. If thetaxpayer has taken the additional first-year depreciation allowance for purposes of computingfederal taxable income, then the taxpayer shall make the following adjustments to federaltaxable income when computing net income for state tax purposes:a. Add the total amount of depreciation taken under section 168(k) of the Internal Revenue

Code for the tax year.b. Subtract the amount of depreciation allowable under the modified accelerated cost

recovery system described in section 168 of the Internal Revenue Code and calculatedwithoutregard to section 168(k).c. Any other adjustments to gains or losses necessary to reflect the adjustments made

in paragraphs “a” and “b”. The director shall adopt rules for the administration of thisparagraph.19B. The additional first-year depreciation allowance authorized in section 168(n) of

the Internal Revenue Code, as enacted by Pub. L. No. 110-343, §710, does not apply incomputing net income for state tax purposes. If the taxpayer has taken the additionalfirst-year depreciation allowance for purposes of computing federal taxable income, then thetaxpayer shall make the following adjustments to federal taxable income when computingnet income for state tax purposes:a. Add the total amount of depreciation taken under section 168(n) of the Internal

Revenue Code for the tax year.b. Subtract the amount of depreciation allowable under the modified accelerated cost

recovery system described in section 168 of the Internal Revenue Code and calculatedwithoutregard to section 168(n).c. Any other adjustments to gains or losses necessary to reflect the adjustments made

in paragraphs “a” and “b”. The director shall adopt rules for the administration of thisparagraph.20. A taxpayer may elect not to take the increased expensing allowance under section

179 of the Internal Revenue Code, as amended by Pub. L. No. 108-27, §202, in computingtaxable income for state tax purposes. If the taxpayer does not take the increased expensingallowance under section 179 of the Internal Revenue Code for state tax purposes, thefollowing adjustments shall be made:



a. Add the total amount of expense deduction taken on section 179 property for federaltax purposes under section 179 of the Internal Revenue Code.b. Subtract the amount of expense deduction on section 179 property allowable for federal

tax purposes under section 179 of the Internal Revenue Code prior to enactment of Pub. L.No. 108-27, §202.c. Any other adjustments to gains and losses to the adjustments made in paragraphs “a”

and “b” pursuant to rules adopted by the director.21. Subtract the amount of foreign dividend income, including subpart F income as

defined in section 952 of the Internal Revenue Code, based upon the percentage of ownershipas set forth in section 243 of the Internal Revenue Code.22. Subtract, to the extent included, the amount of ordinary or capital gain realized by

the taxpayer as a result of the involuntary conversion of property due to eminent domain.However, if the total amount of such realized ordinary or capital gain is not recognizedbecause the converted property is replaced with property that is similar to, or related in useto, the converted property, the amount of such realized ordinary or capital gain shall notbe subtracted under this subsection until the remaining realized ordinary or capital gain issubject to federal taxation or until the time of disposition of the replacement property asprovided under rules of the director. The subtraction allowed under this subsection shall notalter the basis as established for federal tax purposes of any property owned by the taxpayer.23. Reserved.24. A taxpayer is not allowed to take the increased expensing allowance under section 179

of the Internal Revenue Code, as amended by Pub. L. No. 111-5, §1202, in computing taxableincome for state tax purposes.25. Subtract, to the extent included, the amount of any biodiesel production refund

provided pursuant to section 423.4.[C35, §6943-f31; C39, §6943.067; C46, 50, 54, 58, 62, 66, 71, 73, 75, 77, 79, 81, §422.35; 81

Acts, ch 132, §8, 9; 82 Acts, ch 1023, §14, 15, 30, 31, ch 1203, §2, ch 1206, §1]83 Acts, ch 174, §2, 3; 83 Acts, ch 179, §16, 24; 86 Acts, ch 1236, §9; 86 Acts, ch 1238, §20;

86 Acts, ch 1241, §23; 87 Acts, 1st Ex, ch 1, §8 – 11; 89 Acts, ch 175, §3; 89 Acts, ch 225, §20,21; 90 Acts, ch 1168, §46; 90 Acts, ch 1171, §6; 90 Acts, ch 1195, §2; 90 Acts, ch 1251, §53;91 Acts, ch 210, §3; 92 Acts, ch 1222, §5, 6; 92 Acts, ch 1225, §2, 5; 94 Acts, ch 1107, §26; 94Acts, ch 1166, §9, 10, 12; 95 Acts, ch 152, §6, 7; 96 Acts, ch 1129, §113; 97 Acts, ch 135, §8,9; 98 Acts, ch 1078, §8, 12; 98 Acts, ch 1172, §13, 14; 99 Acts, ch 95, §10 – 13; 2001 Acts, ch15, §3, 4; 2001 Acts, ch 116, §7, 28; 2001 Acts, 2nd Ex, ch 6, §23 – 26, 37; 2003 Acts, ch 139,§10 – 12; 2004 Acts, ch 1101, §47; 2004 Acts, 1st Ex, ch 1001, §40 – 42; 2005 Acts, ch 2, §3, 4,6; 2005 Acts, ch 19, §54; 2005 Acts, ch 24, §9 – 11; 2005 Acts, ch 140, §41, 73; 2006 Acts, 1stEx, ch 1001, §42, 49; 2007 Acts, ch 54, §36; 2007 Acts, ch 162, §8, 13; 2007 Acts, ch 186, §17;2008 Acts, ch 1011, §8, 9; 2009 Acts, ch 133, §141 – 143; 2009 Acts, ch 135, §4, 5; 2011 Acts,ch 41, §21 – 25; 2011 Acts, ch 113, §58, 60; 2012 Acts, ch 1019, §130; 2012 Acts, ch 1110, §12;2012 Acts, ch 1136, §35, 39 – 41; 2013 Acts, ch 1, §10 – 12; 2013 Acts, ch 70, §5, 6; 2013 Acts,ch 100, §24, 27; 2015 Acts, ch 1, §10 – 12; 2016 Acts, ch 1107, §4 – 6; 2018 Acts, ch 1161, §94– 98; 2019 Acts, ch 4, §1 – 3Referred to in §422.33, 422.60, 422.61For future amendment to unnumbered paragraph 1, and subsections 3, 4, 5, 7, 8, 10, 11, 16, 17, 18, 19, 19B, 20, 22, and 24, effective on

or after January 1, 2023, contingent upon meeting certain net general fund revenue criteria, see 2018 Acts, ch 1161, §128 – 130, 133, 1342015 amendment to subsection 19A takes effect February 17, 2015, and applies retroactively to January 1, 2014, for tax years ending on

or after that date; 2015 Acts, ch 1, §11, 12For provisions relating to the disallowance of additional first-year depreciation under §168(k) of the Internal Revenue Code for tax years

ending on or after January 1, 2015, see 2016 Acts, ch 1007, §3 – 5; 2017 Acts, ch 157, §11 – 13Subsection 13 takes effect May 25, 2016, and applies retroactively to January 1, 2016, for tax years beginning on or after that date; 2016

Acts, ch 1107, §5, 62018 amendment to subsection 4, effective January 1, 2019, and applies to tax years beginning on or after that date; 2018 Acts, ch 1161,

§97, 98Subsections 14 and 15 effective January 1, 2019, and apply to tax years beginning on or after that date; 2018 Acts, ch 1161, §97, 982018 amendment to subsection 19A effective January 1, 2019, and applies to tax years beginning on or after that date; 2018 Acts, ch

1161, §97, 982019 amendment to subsections 14 and 15 takes effect March 15, 2019, and applies retroactively to January 1, 2018, for tax years

beginning on or after that date; 2019 Acts, ch 4, §2, 3For exchanges under section 1031 of the Internal Revenue Code of personal property for the 2019 calendar year, see 2019 Acts, ch 152,

§11, 16Subsections 14 and 15 amended






















































































422.36 Returns.1. A corporation shall make a return and the return shall be signed by the president or

other duly authorized officer in accordance with forms and rules prescribed by the director.Before a corporation is dissolved and its assets distributed it shall make a return for settlementof the tax for income earned in the income year up to its final date of dissolution.2. When any corporation, liable to taxation under this division, conducts its business in

such a manner as either directly or indirectly to benefit the members or stockholders thereofor any person interested in such business by selling its products or the goods or commoditiesin which it deals at less than the fair price which might be obtained therefor, or where acorporation, a substantial portion of whose capital stock is owned either directly or indirectlyby another corporation, acquires and disposes of the products, goods or commodities of thecorporation so owning a substantial portion of its stock in such a manner as to create a loss orimproper net income for either of said corporations, or where a corporation, owning directlyor indirectly a substantial portion of the stock of another corporation, acquires and disposesof the products, goods, or commodities, of the corporation of which it so owns a substantialportion of the stock, in such a manner as to create a loss or improper net income for either ofsaid corporations, the department may determine the amount of taxable income of either orany of such corporations for the calendar or fiscal year, having due regard to the reasonableprofits which, but for such arrangement or understanding, might or could have been obtained,by the corporation or corporations liable to taxation under this division, from dealing in suchproducts, goods, or commodities.3. Where the director has reason to believe that any person or corporation so conducts a

trade or business as either directly or indirectly to distort the person’s or corporation’s truenet income and the net income properly attributable to the state, whether by the arbitraryshifting of income, through price fixing, charges for services, or otherwise, whereby the netincome is arbitrarily assigned to one or another unit in a group of taxpayers carrying onbusiness under a substantially common control, the director may require such facts as arenecessary for the proper computation of the entire net income and the net income properlyattributable to the state, and shall determine the same, and in the determination thereof thedirector shall have regard to the fair profits which would normally arise from the conduct ofthe trade or business.4. Foreign and domestic corporations shall file a copy of their federal income tax return

for the current tax year with the return required by this section.5. Where a corporation is not subject to income tax and the stockholders of such

corporation are taxed on the corporation’s income under the provisions of the InternalRevenue Code, the same tax treatment shall apply to such corporation and such stockholdersfor Iowa income tax purposes.6. A foreign corporation is not required to file a return if its only activities in Iowa are the

storage of goods for a period of sixty consecutive days or less in a warehouse for hire locatedin this state whereby the foreign corporation transports or causes a carrier to transport suchgoods to that warehouse and provided that none of the goods are delivered or shipped so asto be included in the gross sales of the corporation within this state as provided in section422.33, subsection 2, paragraph “a”, subparagraph (2), subparagraph division (h).7. Notwithstanding subsection 1, a return is not required by a taxpayer as provided in

section 29C.24.[C35, §6943-f32; C39, §6943.068; C46, 50, 54, 58, 62, 66, 71, 73, 75, 77, 79, 81, §422.36]87 Acts, 1st Ex, ch 1, §12; 89 Acts, ch 251, §23; 2001 Acts, ch 97, §1, 2; 2012 Acts, ch 1110,

§13; 2014 Acts, ch 1026, §141; 2016 Acts, ch 1095, §7, 14, 15Referred to in §29C.24, 422.13, 422.31Subsection 7 takes effect April 21, 2016, and applies retroactively to January 1, 2016, for tax years beginning on or after that date; 2016

Acts, ch 1095, §14, 15

422.37 Consolidated returns.Any affiliated group of corporations may, not later than the due date for filing its return

for the taxable year, including any extensions thereof, under rules to be prescribed by thedirector, elect, and upon demand of the director shall be required, to make a consolidated






















return showing the consolidated net income of all such corporations and other informationas the director may require, subject to the following:1. The affiliated group filing under this section shall file a consolidated return for federal

income tax purposes for the same taxable year.2. All members of the affiliated group shall join in the filing of an Iowa consolidated return

to the extent they are subject to the tax imposed by section 422.33, except as otherwiseprovided in section 29C.24.3. Members of the affiliated group exempt from taxation by section 422.34 of the Code

shall not be included in a consolidated return.4. All members of the affiliated group shall use the statutory method of allocation and

apportionment unless the director has granted permission to allmembers to use an alternativemethod of allocation and apportionment.5. Each member of the affiliated group shall consent to the rules governing a consolidated

return prescribed by the director at the time the consolidated return is filed, unless thedirector requires the filing of a consolidated return. The filing of a consolidated return shallbe considered the affiliated group’s consent.6. The filing of a consolidated return for any taxable year shall require the filing of

consolidated returns for all subsequent taxable years so long as the filing taxpayers remainmembers of the affiliated group unless the director determines that the filing of separatereturns will more clearly disclose the taxable incomes of each member of the affiliatedgroup. This determination shall be made after specific request by the taxpayer for the filingof separate returns.7. The computation of consolidated taxable income for the members of an affiliated

group of corporations subject to tax shall be made in the same manner and under the sameprocedures, including all intercompany adjustments and eliminations, as are required forconsolidating the incomes of affiliated corporations for the taxable year for federal incometax purposes in accordance with section 1502 of the Internal Revenue Code.[C35, §6943-f33; C39, §6943.069; C46, 50, 54, 58, 62, 66, 71, 73, 75, 77, 79, 81, §422.37]86 Acts, ch 1213, §10; 87 Acts, 1st Ex, ch 1, §13; 92 Acts, 2nd Ex, ch 1001, §240, 252; 2016

Acts, ch 1095, §8, 14, 15Referred to in §29C.242016 amendment to subsection 2 takes effect April 21, 2016, and applies retroactively to January 1, 2016, for tax years beginning on or

after that date; 2016 Acts, ch 1095, §14, 15

422.38 Statutes governing corporations.All the provisions of sections 422.15 to 422.22 of division II, insofar as the same are

applicable, shall apply to corporations taxable under this division.[C35, §6943-f34; C39, §6943.070; C46, 50, 54, 58, 62, 66, 71, 73, 75, 77, 79, 81, §422.38]

422.39 Statutes applicable to corporation tax.All the provisions of sections 422.24 to 422.27 of division II, respecting payment and

collection, shall apply in respect to the tax due and payable by a corporation taxable underthis division.[C35, §6943-f35; C39, §6943.071; C46, 50, 54, 58, 62, 66, 71, 73, 75, 77, 79, 81, §422.39]

422.40 Cancellation of authority — penalty — offenses.1. If a corporation required by the provisions of this division to file any report or return

or to pay any tax or fee, either as a corporation organized under the laws of this state, or asa foreign corporation doing business in this state for profit, or owning and using a part or allof its capital or plant in this state, fails or neglects to make any such report or return or topay any such tax or fee for ninety days after the time prescribed in this division for makingsuch report or return, or for paying such tax or fee, the director may certify such fact to thesecretary of state. The secretary of state shall thereupon cancel the articles of incorporationof any such corporation which is organized under the laws of this state by appropriate entryupon themargin of the record thereof, or cancel the certificate of authority of any such foreigncorporation to do business in this state by proper entry. Thereupon all the powers, privileges,and franchises conferred upon such corporation by such articles of incorporation or by such




















certificate of authority shall cease and determine. The secretary of state shall immediatelynotify by registered mail such domestic or foreign corporation of the action taken by thesecretary of state.2. Any person or persons who shall exercise or attempt to exercise any powers, privileges,

or franchises under articles of incorporation or certificate of authority after the same arecanceled, as provided in any section of this division, shall pay a penalty of not less thanone hundred dollars nor more than one thousand dollars, to be recovered by an action to bebrought by the director.3. Any corporation whose articles of incorporation or certificate of authority to do

business in this state have been canceled by the secretary of state, as provided in subsection1, or similar provisions of prior revenue laws, upon the filing, within ten years after suchcancellation, with the secretary of state, of a certificate from the department that it hascomplied with all the requirements of this division and paid all state taxes, fees, or penaltiesdue from it, and upon the payment to the secretary of state of an additional penalty of fiftydollars, shall be entitled again to exercise its rights, privileges, and franchises in this state;and the secretary of state shall cancel the entry made by the secretary under the provisionsof subsection 1 or similar provisions of prior revenue laws, and shall issue a certificateentitling such corporation to exercise its rights, privileges and franchises.4. A person, officer or employee of a corporation, ormember or employee of a partnership,

who, with intent to evade a requirement of this division or a lawful requirement of thedirector, fails to pay tax or fails to make, sign, or verify a return or fails to supply informationrequired under this division, is guilty of a fraudulent practice. A person, corporation, officeror employee of a corporation, or member or employee of a partnership, who, with intent toevade any of the requirements of this division, or any lawful requirements of the director,makes, renders, signs, or verifies a false or fraudulent return or statement, or supplies falseor fraudulent information, or who aids, abets, directs, causes, or procures anyone so to do,is guilty of a class “D” felony. The penalty is in addition to all other penalties in this division.[C35, §6943-f36; C39, §6943.072; C46, 50, 54, 58, 62, 66, 71, 73, 75, 77, 79, 81, §422.40]83 Acts, ch 160, §6Referred to in §422.16

422.41 Corporations.All the provisions of sections 422.28, 422.29, and 422.30 of division II in respect to revision,

appeal, and jeopardy assessments shall be applicable to corporations taxable under thisdivision.[C35, §6943-f37; C39, §6943.073; C46, 50, 54, 58, 62, 66, 71, 73, 75, 77, 79, 81, §422.41]

DIVISION IV

RETAIL SALES TAX

422.42 through 422.47 Repealed by 2003 Acts, 1st Ex, ch 2, §151, 205. See chapter 423.

422.47A through 422.47C Repealed by 96 Acts, ch 1034, §70.

422.48 through 422.59 Repealed by 2003 Acts, 1st Ex, ch 2, §151, 205. See chapter 423.



















DIVISION V

TAXATION OF FINANCIAL INSTITUTIONS

Referred to in §15.293A, 15.333, 15.355, 15E.43, 15E.44, 15E.52, 15E.62, 15E.305, 404A.2, 422.1, 422.73, 422.85, 476B.2, 476B.6, 476B.7,476C.4, 476C.6

422.60 Imposition of tax — credit.1. A franchise tax according to and measured by net income is imposed on financial

institutions for the privilege of doing business in this state as financial institutions.2. a. In addition to all taxes imposed under this division, there is imposed upon each

financial institution doing business within the state the greater of the tax determined insection 422.63 or the state alternative minimum tax equal to sixty percent of the maximumstate franchise tax rate, rounded to the nearest one-tenth of one percent, of the statealternative minimum taxable income of the taxpayer computed under this subsection.b. The state alternative minimum taxable income of a taxpayer is equal to the taxpayer’s

state taxable income as computed with the adjustments in section 422.61, subsection 3, andwith the following adjustments:(1) Add items of tax preference included in federal alternative minimum taxable income

under section 57, except subsections (a)(1) and (a)(5), of the Internal Revenue Code, makethe adjustments included in federal alternative minimum taxable income under section 56,except subsections (a)(4), (c)(1), (d), and (g), of the Internal Revenue Code, and add lossesas required by section 58 of the Internal Revenue Code.(2) Make the adjustments provided in section 56(c)(1) of the Internal Revenue Code,

except that in making the calculation under section 56(g)(1) of the Internal Revenue Codethe state alternative minimum taxable income, computed without regard to the adjustmentsmade by this subparagraph, the exemption provided for in subparagraph (4), and the statealternative tax net operating loss described in subparagraph (5), shall be substituted for theitems described in section 56(g)(1)(B) of the Internal Revenue Code.(3) Apply the allocation and apportionment provisions of section 422.63.(4) Subtract an exemption amount of forty thousand dollars. This exemption amount shall

be reduced, but not below zero, by an amount equal to twenty-five percent of the amount bywhich the alternative minimum taxable income of the taxpayer, computed without regard tothe exemption amount in this subparagraph, exceeds one hundred fifty thousand dollars.(5) In the case of a net operating loss beginning after December 31, 1986, which is carried

back or carried forward to the current taxable year, the net operating loss shall be reducedby the amount of items of tax preference and adjustments arising in the tax year which wastaken into account in computing the net operating loss in section 422.35, subsection 11. Thededuction for a net operating loss for a tax year beginning after December 31, 1986, whichis carried back or carried forward to the current taxable year shall not exceed ninety percentof the alternative minimum taxable income determined without regard for the net operatingloss deduction.(6) For purposes of this paragraph, “Internal Revenue Code”means the Internal Revenue

Code of 1954, prior to the date of its redesignation as the Internal Revenue Code of 1986by the Tax Reform Act of 1986, or means the Internal Revenue Code of 1986 as amendedand in effect on December 21, 2017. This definition shall not be construed to include anyamendment to the Internal Revenue Code enacted after the date specified in the precedingsentence, including any amendment with retroactive applicability or effectiveness.c. This subsection is repealed January 1, 2021, for tax years beginning on or after that

date.3. a. (1) For tax years beginning before January 1, 2022, there is allowed as a credit

against the tax determined in section 422.63 for a tax year an amount equal to the minimumtax credit for that tax year.(2) The minimum tax credit for a tax year is the excess, if any, of the net minimum tax

imposed for all prior tax years beginning on or after January 1, 1987, but before January 1,2021, over the amount allowable as a credit under this subsection for those prior tax years.b. (1) The allowable credit under paragraph “a” for a tax year beginning before January





























1, 2021, shall not exceed the excess, if any, of the tax determined in section 422.63 over thestate alternative minimum tax as determined in subsection 2. The allowable credit underparagraph “a” for a tax year beginning in the 2021 calendar year shall not exceed the taxdetermined in section 422.63.(2) The net minimum tax for a tax year is the excess, if any, of the tax determined in

subsection 2 for the tax year over the tax determined in section 422.63 for the tax year.c. This subsection is repealed January 1, 2022, for tax years beginning on or after that

date.4. The taxes imposed under this division shall be reduced by a historic preservation tax

credit allowed under chapter 404A.5. a. The taxes imposed under this division shall be reduced by an investment tax credit

authorized pursuant to section 15E.43 for an investment in a qualifying business.b. The taxes imposed under this division shall be reduced by investment tax credits

authorized pursuant to sections 15.333 and 15E.193B, subsection 6, Code 2014.6. The taxes imposed under this division shall be reduced by an endow Iowa tax credit

authorized pursuant to section 15E.305.7. The taxes imposed under this division shall be reduced by tax credits for wind energy

production allowed under chapter 476B and for renewable energy allowed under chapter476C.8. The taxes imposed under this division shall be reduced by a corporate tax credit

authorized pursuant to section 15.331C for certain sales taxes paid by a third-party developer.9. The taxes imposed under this division shall be reduced by a tax credit authorized

pursuant to section 15E.66, if redeemed, for investments in the Iowa fund of funds.10. The taxes imposed under this division shall be reduced by a redevelopment tax credit

allowed under chapter 15, subchapter II, part 9.11. The taxes imposed under this division shall be reduced by an innovation fund

investment tax credit allowed under section 15E.52.12. a. The taxes imposed under this division shall be reduced by a solar energy system

tax credit equal to sixty percent of the federal energy credit related to solar energy systemsprovided in section 48(a)(2)(A)(i)(II) and section 48(a)(2)(A)(i)(III) of the Internal RevenueCode, not to exceed twenty thousand dollars. For installations occurring on or after January1, 2016, the applicable percentage of the federal energy credit related to solar energy systemsshall be fifty percent.b. The taxpayer may claim the credit pursuant to this subsection according to the same

requirements, conditions, and limitations as provided pursuant to section 422.11L.13. The taxes imposed under this division shall be reduced by a workforce housing

investment tax credit allowed under section 15.355, subsection 3.[C71, 73, 75, 77, 79, 81, §422.60; 82 Acts, ch 1023, §16, 31]83 Acts, ch 179, §17, 22; 86 Acts, ch 1241, §28; 87 Acts, 1st Ex, ch 1, §14; 89 Acts, ch 285,

§6; 2002 Acts, ch 1003, §3, 5; 2002 Acts, ch 1006, §9, 13; 2002 Acts, ch 1156, §4, 8; 2003 Acts,1st Ex, ch 2, §86, 89; 2004 Acts, ch 1175, §406, 418; 2005 Acts, ch 150, §15, 63, 69; 2005 Acts,ch 160, §3, 14; 2006 Acts, ch 1158, §34 – 38; 2007 Acts, ch 162, §9, 13; 2007 Acts, ch 165, §6, 9;2008 Acts, ch 1173, §10; 2008 Acts, ch 1191, §164; 2009 Acts, ch 41, §126; 2010 Acts, ch 1138,§13, 16, 23, 26; 2011 Acts, ch 25, §82, 143; 2011 Acts, ch 130, §43, 47, 71; 2012 Acts, ch 1136,§36, 39 – 41; 2014 Acts, ch 1093, §27 – 29; 2014 Acts, ch 1118, §10, 12; 2014 Acts, ch 1130,§21, 24 – 26, 39; 2014 Acts, ch 1141, §78 – 80; 2015 Acts, ch 30, §119; 2015 Acts, ch 124, §4, 9;2015 Acts, ch 138, §122, 126, 127; 2017 Acts, ch 29, §122; 2019 Acts, ch 152, §10, 15, 65, 66Referred to in §2.48, 422.852015 amendment to subsection 5, paragraph a, takes effect July 2, 2015, and applies to equity investments in a qualifying business made

on or after that date; 2015 Acts, ch 138, §126, 127Subsection 2, paragraph b, subparagraph (6), applies retroactively to January 1, 2019, for tax years beginning on or after that date; 2019

Acts, ch 152, §15Subsection 2, paragraph b, NEW subparagraph (6)Subsection 2, NEW paragraph cSubsection 3 amended

422.61 Definitions.In this division, unless the context otherwise requires:











































































1. “Financial institution”means a state bank as defined in section 524.103, subsection 41,a state bank chartered under the laws of any other state, a national banking association,a trust company, a federally chartered savings and loan association, an out-of-state statechartered savings bank, a financial institution chartered by the federal home loan bank board,a non-Iowa chartered savings and loan association, or a production credit association.2. “Investment subsidiary” means an affiliate that is owned, capitalized, or utilized by a

financial institutionwith one of its purposes being tomake, hold, ormanage, for and on behalfof the financial institution, investments in securities which the financial institution would bepermitted by applicable law to make for its own account.3. “Net income”means the net income of the financial institution computed in accordance

with section 422.35, with the following adjustments:a. Federal income taxes paid or accrued shall not be subtracted.b. Notwithstanding section 422.35, subsection 2, or any other provisions of law, income

from obligations of the state and its political subdivisions and franchise taxes paid or accruedunder this division during the taxable year shall be added. Income from sales of obligations ofthe state and its political subdivisions and interest and dividend income from these obligationsare exempt from the taxes imposed by this division only if the law authorizing the obligationsspecifically exempts the income from the sale and interest and dividend income from the statefranchise tax.c. Interest and dividends from federal securities shall not be subtracted.d. Interest and dividends derived from obligations of United States possessions, agencies,

and instrumentalities, including bonds which were purchased after January 1, 1991, andissued by the governments of Puerto Rico, Guam, and the Virgin Islands shall be added, tothe extent they were not included in computing federal taxable income.e. A deduction disallowed under section 265(b) or section 291(e)(1)(B) of the Internal

Revenue Code shall be subtracted.f. A deduction shall not be allowed for that portion of the taxpayer’s expenses computed

under this paragraph which is allocable to an investment in an investment subsidiary. Theportion of the taxpayer’s expenses which is allocable to an investment in an investmentsubsidiary is an amount which bears the same ratio to the taxpayer’s expenses as thetaxpayer’s average adjusted basis, as computed pursuant to section 1016 of the InternalRevenue Code, of investment in that investment subsidiary bears to the average adjustedbasis for all assets of the taxpayer. The portion of the taxpayer’s expenses that is computedand disallowed under this paragraph shall be added.g. Where a financial institution as defined in section 581 of the Internal Revenue Code is

not subject to income tax and the shareholders of the financial institution are taxed on thefinancial institution’s income under the provisions of the Internal Revenue Code, such taxtreatment shall be disregarded and the financial institution shall compute its net income forfranchise tax purposes in the same manner under this subsection as a financial institutionthat is subject to or liable for federal income tax under the Internal Revenue Code in effectfor the applicable year.4. “Taxable year”means the calendar year or the fiscal year ending during a calendar year,

for which the tax is payable. “Fiscal year” includes a tax period of less than twelve monthsif, under the Internal Revenue Code, a corporation is required to file a tax return covering atax period of less than twelve months.5. “Taxpayer” means a financial institution subject to any tax imposed by this division.[C71, 73, 75, 77, 79, 81, §422.61]85 Acts, ch 230, §8; 87 Acts, ch 18, §2; 87 Acts, 1st Ex, ch 1, §15, 16; 89 Acts, ch 285, §7;

91 Acts, ch 217, §1; 95 Acts, ch 193, §1 – 3; 97 Acts, ch 154, §2, 3; 2001 Acts, ch 116, §10, 28;2012 Acts, ch 1017, §83; 2013 Acts, ch 70, §7Referred to in §321.105, 422.60

422.62 Due and delinquent dates.The franchise tax is due and payable on the first day following the end of the taxable year of

each financial institution, and is delinquent after the last day of the fourthmonth following thedue date or forty-five days after the due date of the federal tax return, excluding extensions of






















time to file, whichever is the later. Every financial institution shall file a return as prescribedby the director on or before the delinquency date.[C71, 73, 75, 77, 79, 81, §422.62]85 Acts, ch 230, §9; 86 Acts, ch 1237, §25

422.63 Amount of tax.The franchise tax is imposed annually in an amount equal to five percent of the net income

received or accrued during the taxable year. If the net income of the financial institution isderived from its business carried on entirely within the state, the tax shall be imposed onthe entire net income, but if the business is carried on partly within and partly without thestate, the portion of net income reasonably attributable to the business within the state shallbe specifically allocated or equitably apportioned within and without the state under rules ofthe director.[C71, 73, 75, 77, 79, 81, §422.63]86 Acts, ch 1194, §2Referred to in §422.60

422.64 Reserved.

422.65 Allocation of revenue. Repealed by 2003 Acts, ch 178, §11.

422.66 Department to enforce.The department shall administer and enforce the provisions of this division, and all

applicable provisions of sections 422.24, 422.25, 422.26, 422.28, 422.29, and 422.30, anddivision VI of this chapter, apply to financial institutions and to the franchise tax imposedby this division.[C71, 73, 75, 77, 79, 81, §422.66]

DIVISION VI

ADMINISTRATION

Referred to in §422.1, 422.13, 422.16, 422.66

422.67 Generally — bond — approval.The director shall administer the taxes imposed by this chapter. The director shall give a

bond in an amount to be fixed by the governor, which has been issued by a surety companyauthorized to transact business in this state and approved by the insurance commissioner asto solvency and responsibility. The reasonable cost of said bond shall be paid by the state,out of the proceeds of the taxes collected under the provisions of this chapter.[C35, §6943-f54; C39, §6943.091; C46, 50, 54, 58, 62, 66, §422.60; C71, 73, 75, 77, 79, 81,

§422.67]Referred to in §99G.30A, 321.105A, 423.42, 423A.6, 423B.6, 423C.4, 423D.4, 423G.5

422.68 Powers and duties.1. The director shall have the power and authority to prescribe all rules not inconsistent

with the provisions of this chapter, necessary and advisable for its detailed administrationand to effectuate its purposes.2. The director may, for administrative purposes, divide the state into districts, provided

that in no case shall a county be divided in forming a district.3. The director may destroy useless records and returns, reports, and communications of

any taxpayer filed with or kept by the department after those returns, records, reports, orcommunications have been in the custody of the department for a period of not less thanthree years or such time as the director prescribes by rule. However, after the accounts ofa person have been examined by the director and the amount of tax and penalty due havebeen finally determined, the director may order the destruction of any records previouslyfiled by that taxpayer, notwithstanding the fact that those records have been in the custody
































of the department for a period less than three years. These records and documents shall bedestroyed in the manner prescribed by the director.4. The department may make photostat, microfilm, electronic, or other photographic

copies of records, reports, and other papers either filed by the taxpayer or prepared by thedepartment. In addition, the department may create and use any system of recordkeepingreasonably calculated to preserve its records for any time period required by law. Whenthese photostat, electronic, microfilm, or other copies have been made, the department maydestroy the original records which are the basis for the copies in any manner prescribed bythe director. These photostat, electronic, microfilm, or other types of copies, when no longerof use, may be destroyed as provided in subsection 3. These photostat, microfilm, electronic,or other records shall be admissible in evidence when duly certified and authenticated bythe officer having custody and control of them.[C35, §6943-f55; C39, §6943.092; C46, 50, 54, 58, 62, 66, §422.61; C71, 73, 75, 77, 79, 81,

§422.68]85 Acts, ch 230, §10; 99 Acts, ch 151, §24, 89; 99 Acts, ch 152, §9, 40Referred to in §99G.30A, 257.22, 321.105A, 422D.3, 423.42, 423A.6, 423B.6, 423C.4, 423D.4, 423G.5, 437A.17, 437B.13

422.69 Moneys paid and deposited.1. All fees, taxes, interest, and penalties imposed under this chapter shall be paid to the

department in the form of remittances payable to the state treasurer and the department shalltransmit each payment daily to the state treasurer.2. Unless otherwise provided the fees, taxes, interest, and penalties collected under this

chapter shall be credited to the general fund.[C35, §6943-f56; C39, §6943.093, 6943.101; C46, §422.62, 422.70; C50, 54, 58, 62, 66,

§422.62; C71, 73, 75, 77, 79, 81, §422.69]85 Acts, ch 32, §88; 85 Acts, ch 258, §13; 88 Acts, ch 1154, §2; 89 Acts, ch 236, §15; 91 Acts,

ch 260, §1231; 92 Acts, ch 1227, §29; 96 Acts, ch 1034, §37Referred to in §99G.30A, 321.105A, 423.42, 423A.6, 423B.6, 423C.4, 423D.4, 423G.5

422.70 General powers — hearings.1. The director, for the purpose of ascertaining the correctness of a return or for the

purpose of making an estimate of the taxable income or receipts of a taxpayer, has thefollowing powers:a. To examine or cause to be examined by an agent or representative designated by the

director, books, papers, records, or memoranda.b. To require by subpoena the attendance and testimony of witnesses.c. To issue and sign subpoenas.d. To administer oaths, to examine witnesses and receive evidence.e. To compel witnesses to produce for examination books, papers, records, and

documents relating to any matter which the director has the authority to investigate ordetermine.2. Where the director finds the taxpayer has made a fraudulent return, the costs of any

hearing, including a contested case hearing, shall be taxed to the taxpayer. In all other casesthe costs shall be paid by the state.3. The fees and mileage to be paid witnesses and charged as costs shall be the same as

prescribed by law in proceedings in the district court of this state in civil cases. All costsshall be charged in the manner provided by law in proceedings in civil cases. If the costsare charged to the taxpayer they shall be added to the taxes assessed against the taxpayerand shall be collected in the same manner. Costs charged to the state shall be certified bythe director and the department of administrative services shall issue warrants on the statetreasurer for the amount of the costs, to be paid out of the proceeds of the taxes collectedunder this chapter.4. In case of disobedience to a subpoena the director may invoke the aid of any court of

competent jurisdiction in requiring the attendance and testimony of witnesses and productionof records, books, papers, and documents, and such court may issue an order requiring theperson to appear before the director and give evidence or produce records, books, papers, and







































documents, as the case may be, and any failure to obey such order of court may be punishedby the court as a contempt thereof.5. Testimony on hearings before the directormay be taken by a deposition as in civil cases,

and any person may be compelled to appear and depose in the same manner as witnessesmay be compelled to appear and testify as hereinbefore provided.[C35, §6943-f57; C39, §6943.094; C46, 50, 54, 58, 62, 66, §422.63; C71, 73, 75, 77, 79, 81,

§422.70]88 Acts, ch 1134, §79; 88 Acts, ch 1243, §9; 95 Acts, ch 83, §10; 2004 Acts, ch 1101, §48;

2013 Acts, ch 30, §90; 2014 Acts, ch 1026, §88Referred to in §99G.30A, 257.22, 321.105A, 422D.3, 423.42, 423A.6, 423B.6, 423C.4, 423D.4, 423G.5, 425.27, 437A.17, 437B.13Contempts, chapter 665

422.71 Assistants — salaries — expenses — bonds.1. The director may appoint and remove such agents, auditors, clerks, and employees as

the director may deem necessary, such persons to have such duties and powers as the directormay, from time to time, prescribe.2. The salaries of all assistants, agents, and employees shall be fixed by the director in a

budget to be submitted to the department of management and approved by the legislature.3. All such agents and employees shall be allowed such reasonable and necessary

traveling and other expenses as may be incurred in the performance of their duties.4. The director may require certain officers, agents, and employees to give bond for

the faithful performance of the duties in such sum and with such sureties as the directormay determine and the state shall pay, out of the proceeds of the taxes collected under theprovisions of this chapter, the premiums on such bonds.5. The director may utilize the office of treasurer of the various counties in order to

administer this chapter and effectuate its purposes, and may appoint the treasurers of thevarious counties as agents to collect any or all of the taxes imposed by this chapter, provided,however, that no additional compensation shall be paid to said treasurer by reason thereof.[C35, §6943-f58; C39, §6943.095; C46, 50, 54, 58, 62, 66, §422.64; C71, 73, 75, 77, 79, 81,

§422.71]88 Acts, ch 1134, §80Referred to in §99G.30A, 321.105A, 331.559, 423.42, 423A.6, 423B.6, 423C.4, 423D.4, 423G.5, 437A.17, 437B.13

422.72 Information deemed confidential — informational exchange agreement —subpoenas.1. a. (1) It is unlawful for the director, or any person having an administrative duty under

this chapter, or any present or former officer or other employee of the state authorized bythe director to examine returns, to divulge in any manner whatever, the business affairs,operations, or information obtained by an investigation under this chapter of records andequipment of any person visited or examined in the discharge of official duty, or the amount orsource of income, profits, losses, expenditures or any particular thereof, set forth or disclosedin any return, or to permit any return or copy of a return or any book containing any abstractor particulars thereof to be seen or examined by any person except as provided by law.(2) It is unlawful for any person to willfully inspect, except as authorized by the director,

any return or return information.(3) However, the director may authorize examination of such state returns and other state

information which is confidential under this section, if a reciprocal arrangement exists, bytax officers of another state or the federal government.b. The director may, by rules adopted pursuant to chapter 17A, authorize examination

of state information and returns by other officers or employees of this state to the extentrequired by their official duties and responsibilities. Disclosure of state information to taxofficers of another state is limited to disclosures which have a tax administrative purpose andonly to officers of those states which by agreement with this state limit the disclosure of theinformation as strictly as the laws of this state protecting the confidentiality of returns andinformation. The director shall place upon the state tax form a notice to the taxpayer thatstate tax information may be disclosed to tax officials of another state or of the United Statesfor tax administrative purposes.









































c. The department shall not authorize the examination of tax information by officers andemployees of this state, another state, or of the United States if the officers or employeeswould otherwise be required to obtain a judicial order to examine the information if it were tobe obtained from another source, and if the purpose of the examination is other than for taxadministration. However, the director may provide sample individual income tax informationto be used for statistical purposes to the legislative services agency. The information shallnot include the name or mailing address of the taxpayer or the taxpayer’s social securitynumber. Any information contained in an individual income tax return which is providedby the director shall only be used as a part of a database which contains similar informationfrom a number of returns. The legislative services agency shall not have access to the incometax returns of individuals. Each request for individual income tax information shall containa statement by the director of the legislative services agency that the individual income taxinformation received by the legislative services agency shall be used solely for statisticalpurposes. This subsection does not prevent the department from authorizing the examinationof state returns and state information under the provisions of section 252B.9. This subsectionprevails over any general law of this state relating to public records.d. The director shall provide state tax returns and return information to the auditor of

state, to the extent that the information is necessary to complete the annual audit of thedepartment required by section 11.2. The state tax returns and return information providedby the director shall remain confidential and shall not be included in any public documentsissued by the auditor of state.2. Federal tax returns, copies of returns, and return information as defined in section

6103(b) of the Internal Revenue Code, which are required to be filed with the departmentfor the enforcement of the income tax laws of this state, shall be held as confidential by thedepartment and subject to the disclosure limitations in subsection 1.3. a. Unless otherwise expressly permitted by section 8A.504, section 8G.4, section

11.41, section 96.11, subsection 6, section 421.17, subsections 22, 23, and 26, section 421.17,subsection 27, paragraph “k”, section 421.17, subsection 31, section 252B.9, section 321.40,subsection 6, sections 321.120, 421.19, 421.28, 422.20, and 452A.63, this section, or anotherprovision of law, a tax return, return information, or investigative or audit information shallnot be divulged to any person or entity, other than the taxpayer, the department, or internalrevenue service for use in a matter unrelated to tax administration.b. This prohibition precludes persons or entities other than the taxpayer, the department,

or the internal revenue service from obtaining such information from the department, and asubpoena, order, or process which requires the department to produce such information to aperson or entity, other than the taxpayer, the department, or internal revenue service for usein a nontax proceeding is void.4. A person violating subsection 1, 2, 3, or 6 is guilty of a serious misdemeanor.5. The director may disclose taxpayer identity information to the press and other media

for purposes of notifying persons entitled to tax refunds when the director, after reasonableeffort and lapse of time, has been unable to locate the persons.6. a. The department may enter into a written informational exchange agreement for tax

administration purposes with a city or county which is entitled to receive funds due to a localhotel and motel tax or a local sales and services tax. The written informational exchangeagreement shall designate no more than two paid city or county employees that have accessto actual return information relating to that city’s or county’s receipts from a local hotel andmotel tax or a local sales and services tax.b. City or county employees designated to have access to information under this

subsection are deemed to be officers and employees of the state for purposes of therestrictions pursuant to subsection 1 pertaining to confidential information. The departmentmay refuse to enter into a written informational exchange agreement if the city or countydoes not agree to pay the actual cost of providing the information and the department mayrefuse to abide by a written informational exchange agreement if the city or county does notpromptly pay the actual cost of providing the information or take reasonable precautions toprotect the information’s confidentiality.7. a. Notwithstanding subsection 3, the director shall provide state tax returns and return































information in response to a subpoena issued by the court pursuant to rule of criminalprocedure 2.5 commanding the appearance before the attorney general or an assistantattorney general if the subpoena is accompanied by affidavits from such person and from asworn peace officer member of the department of public safety affirming that the informationis necessary for the investigation of a felony violation of chapter 124 or chapter 706B.b. The affidavits accompanying the subpoenas and the information provided by the

director shall remain a confidential record which may be disseminated only to a prosecutoror peace officer involved in the investigation, or to the taxpayer who filed the informationand to the court in connection with the filing of criminal charges or institution of a forfeitureaction. A person who knowingly files a false affidavit with the director to secure informationor who divulges information received under this subsection in a manner prohibited by thissubsection commits a serious misdemeanor.8. The department may permit, by rule, the disclosure of state tax information to a person

a taxpayer has authorized to receive such state tax information, in the manner prescribed bythe department.[C35, §6943-f59; C39, §6943.096; C46, 50, 54, 58, 62, 66, §422.65; C71, 73, 75, 77, 79, 81,

§422.72]83 Acts, ch 32, §1, 2; 87 Acts, ch 199, §9; 88 Acts, ch 1028, §34; 88 Acts, ch 1153, §3, 4; 90

Acts, ch 1232, §19; 91 Acts, ch 159, §20; 97 Acts, ch 158, §22, 23; 99 Acts, ch 151, §25, 89; 99Acts, ch 152, §10, 40; 2003 Acts, ch 35, §45, 46, 49; 2003 Acts, ch 145, §257; 2008 Acts, ch1113, §10, 11; 2010 Acts, ch 1146, §15, 26; 2010 Acts, ch 1193, §148, 149; 2011 Acts, ch 122,§52; 2013 Acts, ch 30, §91; 2013 Acts, ch 70, §8, 9; 2019 Acts, ch 152, §18Referred to in §2A.3, 8A.504, 99G.30A, 257.22, 321.105A, 421.17, 421.19, 421.28, 422.20, 422D.3, 423.42, 423A.6, 423B.6, 423C.4, 423D.4,

423G.5, 425.28NEW subsection 8

422.73 Correction of errors — refunds, credits, and carrybacks.1. If it appears that an amount of tax, penalty, or interest has been paid which was not

due under division II, III or V of this chapter, then that amount shall be credited against anytax due on the books of the department by the person who made the excessive payment, orthat amount shall be refunded to the person or with the person’s approval, credited to tax tobecome due. A claim for refund or credit that has not been filed with the department withinthree years after the return upon which a refund or credit claimed became due, or withinone year after the payment of the tax upon which a refund or credit is claimed was made,whichever time is the later, shall not be allowed by the director. If, as a result of a carrybackof a net operating loss or a net capital loss, the amount of tax in a prior period is reduced andan overpayment results, the claim for refund or credit of the overpayment shall be filed withthe department within the three years after the return for the taxable year of the net operatingloss or net capital loss became due. Notwithstanding the period of limitation specified, thetaxpayer shall have six months from the day of final disposition of any income tax matterbetween the taxpayer and the internal revenue service with respect to the particular tax yearto claim an income tax refund or credit.2. Notwithstanding subsection 1, a claim for refund or credit of the individual income

tax paid which resulted from a reduction in a person’s federal adjusted gross income due tosection 1106 of the FAA Modernization and Reform Act of 2012, Pub. L. No. 112-95, shall beconsidered timely if the claim is filed with the department on or before June 30, 2013.3. The department shall enter into an agreement with the internal revenue service for the

transmission of federal income tax reports on individuals required to file an Iowa incometax return who have been involved in an income tax matter with the internal revenue service.After final disposition of the income taxmatter between the taxpayer and the internal revenueservice, the department shall determine whether the individual is due a state income taxrefund as a result of final disposition of such income tax matter. If the individual is due a state


https://www.legis.iowa.gov/docs/ACO/CourtRulesChapter/2.pdf

https://www.legis.iowa.gov/docs/ACO/CourtRulesChapter/2.pdf


















































income tax refund, the department shall notify the individual within thirty days and requestthe individual to file a claim for refund or credit with the department.[C35, §6943-f60; C39, §6943.097; C46, 50, 54, 58, 62, 66, §422.66; C71, 73, 75, 77, 79, 81,

§422.73; 81 Acts, ch 138, §1]83 Acts, ch 154, §1, 2; 83 Acts, ch 155, §1 – 3; 84 Acts, ch 1155, §1; 85 Acts, ch 230, §11;

86 Acts, ch 1194, §3; 86 Acts, ch 1237, §26; 87 Acts, 2nd Ex, ch 1, §12; 89 Acts, ch 285, §8;91 Acts, ch 221, §1, 2; 94 Acts, ch 1023, §51; 98 Acts, ch 1078, §9, 13; 99 Acts, ch 156, §4, 23;2003 Acts, 1st Ex, ch 2, §185, 205; 2006 Acts, 1st Ex, ch 1001, §43, 49; 2007 Acts, ch 186, §18;2011 Acts, ch 25, §143; 2012 Acts, ch 1110, §14; 2013 Acts, ch 1, §13 – 15Referred to in §8A.504, 99G.30A, 257.22, 422.16, 422.91, 422D.3, 423.42, 423B.6, 423C.4, 428A.8, 453B.14

422.74 Certification of refund.If a refund is authorized in any division of this chapter, the director shall certify the amount

of the refund and the name of the payee and draw a warrant on the general fund of the statein the amount specified payable to the named payee, and the treasurer of state shall pay thewarrant.[C35, §6943-f61; C39, §6943.098; C46, 50, 54, 58, 62, 66, §422.67; C71, 73, 75, 77, 79, 81,

§422.74]91 Acts, ch 97, §47Referred to in §99G.30A, 257.22, 321.105A, 422D.3, 423.42, 423A.6, 423B.6, 423C.4, 423D.4, 423G.5, 453B.14

422.75 Statistics — publication.The department shall prepare and publish an annual report which shall include statistics

reasonably available, with respect to the operation of this chapter, including amountscollected, classification of taxpayers, and such other facts as are deemed pertinent andvaluable. The annual report shall also include the reports and information required pursuantto section 421.17, subsection 13, and section 421.60, subsection 2, paragraphs “i” and “l”.[C35, §6943-f62; C39, §6943.099; C46, 50, 54, 58, 62, 66, §422.68; C71, 73, 75, 77, 79, 81,

§422.75]98 Acts, ch 1119, §28; 2006 Acts, ch 1010, §102; 2007 Acts, ch 186, §19Referred to in §99G.30A, 257.22, 321.105A, 422D.3, 423.42, 423A.6, 423B.6, 423C.4, 423D.4, 423G.5, 437A.17, 437B.13


DIVISION VII

ESTIMATED TAXES BY CORPORATIONS ANDFINANCIAL INSTITUTIONS

Referred to in §422.1

422.85 Imposition of estimated tax.A taxpayer subject to the tax imposed by sections 422.33 and 422.60 shall make payments

of estimated tax for the taxable year if the amount of tax payable, less credits, can reasonablybe expected to be more than one thousand dollars for the taxable year. For purposes of thisdivision, “estimated tax” means the amount which the taxpayer estimates to be the tax dueand payable under division III or V of this chapter for the taxable year.[C79, 81, §422.85]89 Acts, ch 251, §26Referred to in §422.86

422.86 Payment of estimated tax.A taxpayer required to pay estimated tax under section 422.85 shall pay the estimated tax

in accordance with the following schedule:1. If it is first determined that the estimated tax will be greater than one thousand dollars

on or before the last day of the fourth month of the taxable year, the estimated tax shall bepaid in four equal installments. The first installment shall be paid not later than the last day ofthe fourth month of the taxable year. The second and third installments shall be paid not later










































































than the last day of the sixth and ninth months of the taxable year, and the final installmentshall be paid on or before the last day of the taxable year.2. If it is first determined that the estimated tax will be greater than one thousand dollars

after the last day of the fourth month but not later than the last day of the sixth month of thetaxable year, the estimated tax shall be paid in three equal installments. The first installmentshall be paid not later than the last day of the sixth month of the taxable year. The secondinstallment shall be paid on or before the last day of the ninth month of the taxable year andthe third installment shall be paid on or before the last day of the taxable year.3. If it is first determined that the estimated tax will be greater than one thousand dollars

after the last day of the sixth month but not later than the last day of the ninth month of thetaxable year, the estimated tax shall be paid in two equal installments. The first installmentshall be paid not later than the last day of the ninth month and the second installment shallbe paid on or before the last day of the taxable year.4. If it is first determined that the estimated tax will be greater than one thousand dollars

after the last day of the ninth month of the taxable year, the estimated tax shall be paid in fullon or before the last day of the taxable year.5. If, after paying any installment of estimated tax, the taxpayer makes a new estimate,

the remaining installments shall be ratably adjusted to reflect the increase or decrease in theestimated tax.[C79, 81, §422.86]89 Acts, ch 251, §27

422.87 Reserved.

422.88 Failure to pay estimated tax.1. If the taxpayer submits an underpayment of the estimated tax, the taxpayer is subject

to an underpayment penalty at the rate established under section 421.7 upon the amount ofthe underpayment for the period of the underpayment.2. The amount of the underpayment shall be the excess of the amount of the installment

which would be required to be paid if the estimated tax was equal to one hundred percentof the tax shown on the return of the taxpayer for the taxable year over the amount ofinstallments paid on or before the date prescribed for payment.3. If the taxpayer did not file a return during the taxable year, the amount of the

underpayment shall be equal to one hundred percent of the taxpayer’s tax liability for thetaxable year over the amount of installments paid on or before the date prescribed forpayment.4. The period of the underpayment shall run from the date the installment was required

to be paid to the last day of the fourth month following the close of the taxable year or thedate on which such portion is paid, whichever date first occurs.5. A payment of estimated tax on any installment date shall be considered a payment

of any previous underpayment only to the extent such payment exceeds the amount of theinstallment determined under subsection 2 or 3 of this section for such installment date.[C79, 81, §422.88; 82 Acts, ch 1180, §4, 9]95 Acts, ch 83, §11, 36; 2009 Acts, ch 179, §135, 153Referred to in §422.89

422.89 Exception to penalty.The penalty for underpayment of any installment of estimated tax imposed under section

422.88 shall not be imposed if the total amount of all payments of estimated tax made onor before the last date prescribed for the payment of such installment equals or exceeds theamount which would have been required to be paid on or before such date if the estimatedtax amount at least to one of the following:1. The tax shown on the return of the taxpayer for the preceding taxable year, if a return

showing a liability for tax was filed by the taxpayer for the preceding taxable year and suchpreceding year was a taxable year of twelve months.2. An amount equal to the tax computed at the rates applicable to the taxable year but













otherwise on the basis of the facts shown on the return of the taxpayer for, and the lawapplicable to, the preceding taxable year.3. a. An amount equal to one hundred percent of the tax for the taxable year computed

by placing on an annualized basis the taxable income:(1) For the first three months of the taxable year if an installment is required to be paid in

the fourth month;(2) For the first three months or for the first five months of the taxable year if an

installment is required to be paid in the sixth month;(3) For the first sixmonths or for the first eight months of the taxable year if an installment

is required to be paid in the ninth month; and(4) For the first nine months or for the first eleven months of the taxable year if an

installment is required to be paid in the twelfth month of the taxable year.b. The taxable income shall be placed on an annualized basis by multiplying the taxable

income as determined under this subsection by twelve and dividing the resulting amount bythe number of months in the taxable year (three, five, six, eight, nine, or eleven months, asthe case may be) referred to in this subsection.[C79, 81, §422.89]95 Acts, ch 83, §12, 36; 2011 Acts, ch 25, §143; 2012 Acts, ch 1110, §15, 17

422.90 Penalty not subject to waiver. Repealed by 99 Acts, ch 151, §85, 89.

422.91 Credit for estimated tax.1. Any amount of estimated tax paid is a credit against the amount of tax due on a final,

completed return, and any overpayment of five dollars or more shall be refunded to thetaxpayer with interest in accordance with section 421.60, subsection 2, paragraph “e”, andthe return constitutes a claim for refund for this purpose. Amounts less than five dollars shallbe refunded to the taxpayer only upon written application in accordance with section 422.73,and only if the application is filed within twelve months after the due date for the return.2. In lieu of claiming a refund, the taxpayer may elect to have the overpayment shown on

its final, completed return for the taxable year credited to the tax liability for the followingtaxable year.[C79, 81, §422.91; 81 Acts, ch 133, §3, 4; 82 Acts, ch 1180, §5, 9]89 Acts, ch 251, §28; 2018 Acts, ch 1161, §10, 15, 162018 amendment applies retroactively to January 1, 2018, for tax years beginning, and for refunds issued, on or after that date; 2018

Acts, ch 1161, §16

422.92 Rules for short taxable year.A taxpayer having a taxable year of less than twelve months shall pay estimated tax under

rules adopted by the director.[C79, 81, §422.92]89 Acts, ch 251, §29

422.93 Public utility accounting method.Nothing in this chapter shall be construed to require the utilities board of the department

of commerce to allow or require the use of any particular method of accounting by any publicutility to compute its tax expense, depreciation expense, or operating expense for purposesof establishing its cost of service for rate-making purposes and for reflecting operating resultsin its regulated books of account.[82 Acts, ch 1023, §17]


















DIVISION VIII

ALLOCATION OF REVENUES

Referred to in §422.1, 422.2

422.100 Allocation to the child care credit fund. Repealed by 2009 Acts, ch 182, §138.

422.101 through 422.104 Repealed by 2002 Acts, ch 1150, §22.


DIVISION IX

FUEL TAX CREDIT

Referred to in §422.1, 452A.17

422.110 Income tax credit in lieu of refund.In lieu of the fuel tax refund provided in section 452A.17, a person or corporation subject

to taxation under division II or III of this chapter may elect to receive an income tax credit.The person or corporation which elects to receive an income tax credit shall cancel its refundpermit obtained under section 452A.18 within thirty days after the first day of its tax year orthe permit becomes invalid at that time. For the purposes of this section, “person” includesa person claiming a tax credit based upon the person’s pro rata share of the earnings froma partnership, limited liability company, or corporation which is not subject to a tax underdivision II or III of this chapter as a partnership, limited liability company, or corporation. Ifthe election to receive an income tax credit has been made, it remains effective for at leastone tax year, and for subsequent tax years unless a change is requested and a new refundpermit applied for within thirty days after the first day of the person’s or corporation’s taxyear. The income tax credit shall be the amount of the Iowa fuel tax paid on fuel purchasedby the person or corporation and is subject to the conditions provided in section 452A.17 withthe exception that the income tax credit is not available for refunds relating to casualty losses,transport diversions, pumping credits, blending errors, idle time, power takeoffs, reefer units,and exports by distributors.The right to a credit under this section is not assignable and the credit may be claimed only

by the person or corporation that purchased the fuel.[C75, 77, §422.86; C79, 81, §422.110; 82 Acts, ch 1176, §2]86 Acts, ch 1141, §19; 86 Acts, ch 1241, §29; 88 Acts, ch 1205, §22, 23; 95 Acts, ch 155, §6,

7, 44; 99 Acts, ch 151, §26, 89; 2001 Acts, ch 116, §11Referred to in §2.48

422.111 Fuel tax credit as income tax credit.The fuel tax credit may be applied against the income tax liability of the person or

corporation as determined on the tax return filed for the year in which the fuel tax was paid.The department shall provide forms for claiming the fuel tax credit. If the fuel tax creditwould result in an overpayment of income tax, the person or corporation may apply fora refund of the amount of overpayment or may have the overpayment credited to incometax due in subsequent years. Each person or corporation that claims a fuel tax credit shallmaintain the original invoices showing the purchase of the fuel on which a credit is claimed.An invoice is not acceptable in support of a claim for credit unless the invoice is a separateserially numbered invoice covering no more than one purchase of motor fuel or undyedspecial fuel, prepared by the seller on a form approved by the department, or unless theinvoice is legibly written with no corrections or erasures and shows the date of sale, thename and address of the seller and of the purchaser, the kind of fuel, the gallonage in figures,the per gallon price of the fuel, the total purchase price including the Iowa fuel tax, and thatthe total purchase price has been paid. However, as to refund invoices made on a billingmachine, the department may waive these requirements. If an original invoice is lost or


























destroyed, the department may approve a credit supported by a copy identified and certifiedby the seller as being a true copy of the original. Each person or corporation that claims afuel tax credit shall maintain complete records of purchases of motor fuel or undyed specialfuel on which Iowa fuel tax was paid, and for which a fuel tax credit is claimed.In order to verify the validity of a claim for credit the department shall have the right

to require the claimant to furnish such additional proof of validity as the department maydetermine and to examine the books and records of the claimant. Failure of the claimant tofurnish the books and records for examination shall constitute a waiver of rights to claima credit related to that taxpayer’s year and the department may disallow the entire creditclaimed by the taxpayer for that year.[C75, 77, §422.87; C79, 81, §422.111]88 Acts, ch 1205, §24; 99 Acts, ch 151, §27, 28, 89

422.112 Aircraft fuel tax transfer.The department shall certify quarterly to the treasurer of state the amount of credit that has

been taken against income tax liability since the time of the last certification, for the Iowa fueltax paid on motor fuel, special fuel and motor fuel used for the purpose of operating aircraft,and the treasurer of state shall transfer the amount of the total credit from the motor fueltax fund, or in the case of aircraft motor fuel, from the separate fund established by section452A.82, to the general fund of the state.[C75, 77, §422.88; C79, 81, §422.112]


DIVISION X

LIVESTOCK PRODUCTION TAX CREDIT

422.120 through 422.122 Repealed by 2009 Acts, ch 179, §152, 153.






CHAPTER422 Repealedby2012Acts,ch - IowaCh422,INDIVIDUALINCOME,CORPORATE,ANDFRANCHISETAXES 2 422.12M...

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